Winchester has become the least affordable city in the UK to buy a home, as property prices average 14 times people’s earnings.
The Hampshire city has overtaken Oxford, according to analysis by Halifax, the UK’s biggest mortgage lender. A home in Winchester will set buyers back an average £630,432 – the highest in the country and up 8% on 2020, while average earnings are £45,059.
Price growth in Winchester was far outstripping the rest of the UK in relation to wages, Halifax said. Its analysis of 61 cities in the year to June shows that the average home costs 8.1 times average earnings, up from 7.5 times last year. The ratio has increased for eight years.
Russell Galley, the managing director of Halifax, said: “We can see from our research that affordability is significantly better in the north and there are now just two cities – Plymouth and Portsmouth – with better than average affordability in the south.”
Least affordable cities
The housing market has been fuelled by a temporary stamp duty cut, which was in place for a year, and people’s desire to move to leafier locations and bigger homes after lifestyle changes during the coronavirus pandemic, with many switching to working from home.
Oxford is the second least affordable city, with prices at 12.4 times earnings, followed by Truro and Bath in the south-west, Chichester in the south-east, Cambridge, Brighton and Hove, and Greater London, where the average home costs 11 times earnings.
Over the past year, the average house price in UK cities has grown by 10.3% to £287,440, while people’s wages in the same locations rose by only 2.1% to £35,677.
House prices in Salisbury grew the most, by 36% to £392,355, followed by Hereford, with 29% price rises to £316,929, and Lancaster and Birmingham, both up 19%.
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At the other end of the scale, Londonderry in Northern Ireland remains the country’s most affordable city for the third year in a row, at 4.7 times earnings. A 13% increase in average earnings last year in Carlisle led to it joining Bradford in second place (both 4.8) as most affordable, ahead of Stirling, Aberdeen, and Glasgow, all with a prices-to-earnings ratio of 5.4.
Looking back further, since 2011, Gloucester’s average home has doubled in price to £287,600, followed by London and Chichester (both up 98%), and Manchester (up 97%). The average UK city house price growth over the same period was 71%.
Winchester now has the highest average house prices of any UK city, ahead of St Albans (£604,423) and London (£564,695). The least expensive average house prices among cities are found in Londonderry (£155,917) and Hull (£156,924).
Least affordable cities in 2021 (price-to-earnings ratio followed by the average house price and average annual earnings)
1 Winchester, south-east, 14.0, £630,432, £45,059
2 Oxford, south-east, 12.4, £486,928, £39,220
=3 Truro, south-west, 12.1, £356,788, £29,558
=3 Bath, south-west, 12.1, £476,470, £39,508
5 Chichester, south-east, 10.6, £446,899, £37,352
6 Cambridge, East Anglia, 11.9, £482,300, £40,492
7 Brighton and Hove, south-east, 11.6, £449,243, £38,737
8 London, south-east, 11.0, £564,695, £51,257
=9 St Albans, south-east, 10.2, £604,423, £59,391
=9 Chelmsford, south-east, 10.2, £424,690, £41,781
Most affordable UK cities in 2021 (price-to-earnings ratio followed by the average house price and average annual earnings)
1 Londonderry, Northern Ireland, 4.7, £155,917, £33,138
=2 Carlisle, north, 4.8, £163,232, £34,087
=2 Bradford, Yorkshire and the Humber, 4.8, £164,410, £34,219
=4 Stirling, Scotland, 5.4, £208,927, £38,744
=4 Aberdeen, Scotland, 5.4, £205,199, £38,016
=4 Glasgow, Scotland, 5.4, £196,625, £36,205
7 Perth, Scotland, 5.5, £203,229, £36,700
=8 Inverness, Scotland, 5.6, £191,840, £34,373
=8 Hull, Yorkshire and the Humber, 5.6, £156,424, £27,730
10 Dundee, Scotland, 5.8, £181,150, £31,344
