London has long been one of the most expensive parts of the UK to buy homes in, and in figures cited by property funding specialist Quinshaw Finance, the city dominates a list of the top 10 least affordable places to buy a home in the UK.
Highlighting figures from the Office for National Statistics (ONS), the London-based alternative property lender revealed that eight of the top 10 most expensive areas to buy homes in 2019 were in the capital. Topping the list was Kensington and Chelsea, where properties were a staggering 38.33 times the average annual salary last year. Property prices in this affluent borough averaged £1,256,000.
Also featuring in the top 10, Westminster recorded property prices that were 20.66 times the median yearly salary, while Richmond Upon Thames wasn’t far behind at 18.44 times. Camden, Hammersmith and Fulham, Haringey, and Barnet were also listed as among the least affordable locations in the UK.
At the other end of the scale, the most affordable area was Copeland in Cumbria, where homes were just 2.67 times the median annual salary. The average property in this borough cost £120,000 in 2019.
Good news for property buyers nationally
Although purchasing a home in expensive parts of London may not be possible for many people, there is positive news for those looking to buy homes across the country more generally. The Quinshaw Finance reviews of ONS figures also revealed that UK-wide, properties became more affordable in 2019 compared with 2018.
The average buyer needed to spend 7.8 times their annual salary last year to purchase a home. This was a fall of 0.2 on the same data from 2018. The improvement in affordability was partly thanks to a rise in average salaries from £29,667 in 2018 to £30,500 last year.
According to Quinshaw Finance head analyst Greg Davies, rises in public sector pay and an increase in the National Minimum Wage had a positive impact on the property market. The minimum wage in the UK for workers aged 25 and over increased from £7.83 to £8.21, while hundreds of thousands of public sectors workers, from teachers and doctors to soldiers, saw an above inflation pay rise.
First improvement in affordability since 2015
Mr Davies noted that the improvement in affordability last year was the first seen since 2015. He added: “Given that this happened amid the instability of Brexit negotiations and the general election, it is cause for great confidence in the property market.”
However, he went on to say that in the context of the coronavirus pandemic and with a potential no deal Brexit taking place later this year, he hopes the property market remains stable.