80% of UK’s least affordable housing areas are in the capital, Quinshaw Finance highlights

The UK capital dominates the list of the country’s top 10 least affordable areas for housing, according to London-based property experts Quinshaw Finance. The alternative property lender revealed that a staggering 80 per cent of UK’s most expensive property locations can be found in London, with the borough of Kensington and Chelsea topping the list.

Responding to data in the ‘Housing affordability in England and Wales’ report published by the Office for National Statistics (ONS), the property lending experts highlighted that eight of the top 10 most expensive areas to buy homes in 2019 were located in the capital. Aside from Kensington and Chelsea, where the average property price is around £1,256,000 – 38.33 times the average annual salary of a buyer – the London boroughs of Westminster and Richmond Upon Thames were found to have ratios of 20.66 and 18.44 respectively, while Camden, Wandsworth, Haringey, Barnet and Hammersmith and Fulham also featured in the top 10 least affordable housing areas.

Location is key

As well as highlighting several London boroughs as some of the most expensive places to buy a house in the country, Quinshaw Finance – which primarily focuses on helping property developers to secure funding – also shone a light on the most affordable areas in the UK. Copeland in Cumbria was found to be the cheapest place to buy a house with average property prices around 2.67 times the average annual salary, while Blaenau Gwent in Wales, and Barrow-in-Furness and Burnley in the north of England were all placed in the top 10 most affordable housing areas, all with ratios under four times the average UK salary. 

The Quinshaw Finance reviews of ONS figures also revealed that on a nationwide scale, housing in the UK became more affordable in 2019 compared with 2018. Property cost on average 7.8 times the annual salary of the typical buyer in 2019. This represents a reduction of 0.2 when compared to the figures for 2018. According to Quinshaw Finance head analyst Greg Davies, this improvement in affordability can be partially attributed to a rise in public sector pay and an increase in the National Minimum Wage. Collectively, this saw the average UK salary rise from £29,667 in 2018 to £30,500 last year.

A cause for ‘great confidence’ in the UK housing market 

Responding to the figures, Mr Davies stressed the importance of affordable property, highlighting that 2019 saw the first improvement in the UK housing market in terms of affordability since 2015. He said: “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 also urged caution, noting that in light of the COVID-19 pandemic, on top of the possibility of a no-deal Brexit later in 2020, whether or not this trend will continue this year is still a matter of debate.