Most and least affordable places for first-time home buyers revealed

First-time buyers face spending at least six times their annual wages to get on the property ladder in nearly half (45%) of Britain’s local authority areas as affordability becomes more stretched.

Back in 2016, just over a third (35%) of local authority areas had average house price-to-earnings ratios of six or more, according to the analysis by Nationwide Building Society.

The London borough of Kensington and Chelsea is the least affordable place for those trying get on the property ladder, while East Ayrshire in Scotland remains the most affordable, Nationwide’s report found.

First-time buyers face paying nearly 15 times their earnings to buy a home in Kensington and Chelsea, compared with just under two and-a-half times earnings in East Ayrshire.

The report used official house price and earnings data from 2021.

The race for more living space during the coronavirus pandemic as people relocated may have priced some first-time buyers out of the market in more rural areas.

Andrew Harvey, a senior economist at Nationwide, said: “Most authorities in the South West (of England) have seen a deterioration in affordability over the last year, but Cotswold replaced Bath and North East Somerset as the least affordable area, with a house price earnings ratio of 8.6.

“This district includes sought-after towns such as Cirencester, Tetbury and Moreton-in-Marsh.”

Swindon remains the most affordable area in the South West, with a house price- to-earnings ratio of 5.4, he said.

He continued: “Rutland, the smallest historic county in England, remains the least affordable authority in the East Midlands, while in the West Midlands it is Malvern Hills.

“In Yorkshire and the Humber, the district of Ryedale in North Yorkshire continues to have the highest house price-to-earnings ratio, despite seeing weaker price growth over the last year than most of the region. This predominately rural area includes towns such as Malton and Pickering.”

Barnsley has replaced North East Lincolnshire as the most affordable area in Yorkshire and the Humber, he said.

Affordability in Craven, which includes the market town of Skipton in Yorkshire, has improved since 2016, with the average first-time buyer house price-to-earnings ratio decreasing from 6.5 to 5.5.

Harvey added: “The least affordable area in the North West government region is South Lakeland in Cumbria, which includes parts of the popular Lake District national park, including Ambleside and Windermere.”

Copeland remains the most affordable area in the North West of England, despite average prices rising 11% over the past year, he said.

In Wales, Harvey said the Vale of Glamorgan has replaced Cardiff as the least affordable area.

He said: “Prices in the Vale, which includes Barry, rose by 17% year-on-year, reflecting a trend in Wales of stronger price growth in areas outside of the major cities.”

Merthyr Tydfil remains the most affordable local authority in Wales, he added.

In Scotland, Edinburgh continues to have the highest house price-to-earnings ratio.

“East Ayrshire, in Scotland, continues to be the most affordable authority in Great Britain, with average first time buyer house prices just 2.4 times average earnings,” Harvey said.

“East Ayrshire covers a large geographic area to the south of Glasgow, but its main towns are Kilmarnock and Cumnock.”

He said that, in Scotland, Aberdeen has seen the biggest improvement in housing affordability since 2016, largely due to house price falls there.

The average first-time buyer house price-to-earnings ratio has declined from 4.6 to 3.4.

Harvey added: “North Tyneside is the least affordable area within the North East, although average prices are only around four times average earnings, so this is still relatively affordable compared to some of the other locations in our list.

“The North East region also has the smallest gap between the least and most affordable authorities…

“In the North East, County Durham has the lowest house price-to-earnings ratio at 3.1.”

In London, Bromley is the most affordable borough, with a house price-to-earnings ration of 7.4.

Here are the least affordable local authority areas for first-time buyers in Britain’s nations and regions, according to Nationwide Building Society, with the average house price-to-earnings ratio:

– London, Kensington and Chelsea, 14.7

– South East, Oxford, 10.1

– East of England, Hertsmere, 10.0

– South West, Cotswold, 8.6

– East Midlands, Rutland, 7.3

– Yorkshire and the Humber, Ryedale, 7.0

– West Midlands, Malvern Hills, 6.8

– North West, South Lakeland, 6.7

– Wales, Vale of Glamorgan, 6.4

– Scotland, City of Edinburgh, 5.9

– North East, North Tyneside, 4.3

And here are the most affordable places for first-time buyers in each area: