Homes at their most unaffordable since 2009

Stirling is the UK's most affordable city to own a home for the second year in a row. Picture: TSPL
Stirling is the UK's most affordable city to own a home for the second year in a row. Picture: TSPL
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The cost of a typical home in a UK city is at its most unaffordable level since 2009 as ­buyers face stretching their wages further to keep up with rising property prices, a report has found.

A city home now costs 6.1 times gross average annual earnings, up from a multiple of 5.8 times average earnings 12 months ago, as the housing market recovery has spread across the country, Lloyds Bank’s Affordable Cities Review found.

Meanwhile, Edinburgh is ­Scotland’s least affordable city, with the typical house sitting at more than six times the average local wage, while the university city of Stirling is the most affordable for the second year in a row – and tops the UK table.

Despite a deterioration in affordability over the past year for city dwellers in Scotland, Stirling has an average property price of £158,645 – 3.85 times gross average annual earnings. In Edinburgh, however, the typical cost of a home is £216,424.

Aberdeen recorded the biggest price rise of any UK city over the past decade with a gain of 88 per cent as a result of rising housing demand due to the performance of the oil and gas sector. Even over a period of five years, the city saw a 26 per cent increase in house prices, compared to just 3 per cent in Stirling.

The average price for a city home in Scotland is £175,962, which is 5.24 times gross annual average earnings – a 7 per cent increase on last year’s figure. However, city living in Scotland, which is an average of 5.24 times the local wage, is still more affordable than the UK city average of 6.12 times the average salary. However, although it is, on average, now at the same level as in 2006, it remains 14 per cent lower than the peak of 6.12 times earnings in 2008.

Nitesh Patel, housing economist at the bank, said: “Although we have seen a 7 per cent decrease in home affordability in cities in Scotland, the average price for a city home is significantly below the peak of 2008 and is more affordable than the UK city average.”

Experts said the overall improvement in affordability across Scottish cities as a whole over the past seven years has been caused by a combination of an average house price decline of £11,408 and a 10 per cent increase in the gross average annual earnings.

Oxford is the UK’s least affordable city, with the average house price standing at £361,469, nearly 11 times the local wage.

Winchester, Cambridge, Chichester and Brighton and Hove completed the top five least affordable cities list, while Londonderry in Northern Ireland, Lancaster in the North-west of England were next in highest affordability.

Until being tipped from the top spot by Aberdeen, the top house price performer has been London, where the value of the average property has increased by 40 per cent since 2010.

SEE ALSO:

Stirling named most affordable city in UK

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