A new study has found the gap between earnings and house prices has fallen, with homes across half the UK more affordable now than in 2007.
Research by the Yorkshire Building Society has shown that houses in Leeds, Birmingham and Glasgow are becoming more affordable with the continuing affordability crisis in London.
“Across London and large swaths of southern England, which were already some of the most unaffordable parts of the country, it has become increasingly difficult for first-time buyers and those wanting to move up the housing ladder to be able to buy their first or next home,” said Andrew McPhillips, the chief economist at Yorkshire Building Society.
“The north of England, Wales and Scotland present a different picture entirely, with many places, such as Edinburgh, Peterborough and Birmingham, becoming more affordable than they were before the credit crunch.
“While some northern cities, such as Manchester, are less affordable than they were in 2007, in much of the north of England, Scotland and Wales, the gap between earnings and house prices is about one-third of the average for London.”
The research comes as the number of people leaving London is at a five-year high, departing for more affordable areas. The report was based on earnings figures and Land Registry data in 356 areas.
According to the report, Newcastle-upon-Tyne is 26 percent more affordable than it was in 2007. The biggest difference in UK housing affordability was found to be in Rickmansworth, Hertfordshire.
Homes that have become less affordable are found in London boroughs of Haringey, Westminster, Southwark, Waltham Forest and Hackney.
“We are at a high-water mark in terms of the differential. London is showing signs of slowing,” said Lucian Cook, Savills’ director of residential research.
“The differential is a risk to London’s competitiveness in terms of its attractiveness to talent. Graduates will look at the other major employment centres and think their housing costs will be lower. They are less likely to start their career in London than in Bristol or Birmingham.”