Affordability gap closes in parts of South West

RISING salaries in parts of the South West are making it easier for people to get on the housing ladder, new analysis suggests.

While the gap between average earnings and house prices remains impossible to bridge for many in some coastal and rural areas of the region, some have seen improvements in rates of pay, while house prices have not risen quite as fast.

Nationwide Building Society measured by the typical first-time buyer house price to earnings ratios in local areas across Britain, using Office for National Statistics (ONS) data.

Andrew Harvey, senior economist at Nationwide, said: “In the South West, the district of Torridge in north Devon has seen its house price to earnings ratio improve from 6.2 to 5.3. This appears to be due to strong growth in earnings over the period, which were 32% higher compared with 2015.”

Kensington and Chelsea is the least affordable location in Britain for people trying to get on the property ladder, while East Ayrshire in Scotland is the most affordable place, the analysis found.

In Kensington and Chelsea, the typical house price is 16.8 times earnings, the report found, while East Ayrshire in Scotland has average first-time buyer house prices at 2.3 times typical earnings.

Mr Harvey said: “In Wales and Scotland, the respective capital cities see strong demand for housing and have the highest house price to earnings ratios.”

Looking at the areas which have seen the biggest improvements in affordability between 2015 and 2020, Mr Harvey said: “The London borough of Hammersmith and Fulham has seen the biggest improvement in affordability over the period, with the average first-time buyer house price to earnings ratio falling from 15.6 to 11.5.

“This was driven by a combination of lower prices (12% lower than five years ago) and higher earnings (up 17% compared with 2015).

“In Scotland, the city of Aberdeen has seen the greatest improvement in affordability, with average firsttime buyer house price to earnings ratio declining from 4.7 to 3.2 in the last five years. This is predominantly due to the 28% fall in average prices over the period, though incomes have also risen by 7%.

“Affordability gains in other regions have been more modest. Overall, 25% of local authorities in Great Britain have seen an improvement in affordability compared with 2015.”

After Kensington and Chelsea, the least affordable places to buy a house in Britain are Hertsmere in the East, Oxford in the South East, Bath and North East Somerset in the South West, Rutland in the East Midlands, Ryedale in Yorkshire, Redditch in the West Midlands, South Lakeland in the North West, Cardiff in Wales and Edinburgh in Scotland.

The most affordable areas include Copeland in the North West, County Durham in the North East, Merthyr Tydfil in Wales, Stoke on Trent in the West Midlands, Bolsover in the East Midlands, Great Yarmouth in the East of England, Swindon in the South West, Bromley in London, Dover in the South East and South East Lincolnshire in the Humber.