Home affordability in UK cities hits nine year high
Home affordability for city dwellers is at its most favourable in nearly a decade, according to the Lloyds TSB Affordable Cities Review. The average price for a city home in the UK of £173,202 stands at 5.5 times gross annual average earnings; the lowest ratio since 2003 (5.3). This is an improvement on 5.7 times gross annual average earnings a year ago and is significantly below the peak of 7.2 in 2008. Despite these gains in affordability, city living remains less affordable than the UK average (4.3).
Suren Thiru, housing economist at Lloyds TSB, commented:
"The improvement in housing affordability within many of our major urban conurbations has been significant during the past few years and reflects the decline in house prices over the period. There is, however, a distinct north-south divide to the locations of the most affordable UK cities."
"Looking forward, the marked improvement in city affordability is likely to help support demand for those able to enter the housing market. Much of this benefit, however, maybe offset by the continuing difficulties many households face in raising a deposit and uncertainty over the outlook for the UK economy."