One thing to remember about the property market is that everything is subjective. Even when you look at facts, such as house prices, it is possible for people to form different opinions on stated figures. To one buyer or household, a home may represent excellent value for money, but for other likely buyers, a house may be deemed far too expensive.
This is why affordability is crucial when considering the property market. Work undertaken by the research team at Zoopla proves there is a sizable gap with respect to housing affordability in England. This isn’t new, and even if you haven’t found evidence to support this, you will likely have had suspicions about this being the case.
London isn’t an affordable option for many buyers
The research looked at 20 major cities across Great Britain. For London, the average house price of £483,100 represents 13.1 times the average earnings of a London resident. This figure is a fall from the high of 14.1 times the average earnings, which was the figure in 2017. However, in comparing the number to the 20-year house price to earnings ratio, the current value is significantly higher. Over the longer-term, the house price to earnings ratio for London is 9.9 times.
Other expensive cities in the south of England, Cambridge and Oxford, have a ratio of 12.2 and 11.9 times the average income, respectively. You also have areas like Bristol, Portsmouth and Southampton have high proportions.
Richard Donnell is the Research and Insight Director at Zoopla, and he said; “Housing affordability is slowly starting to improve in London as earnings growth outstrips house price inflation. There has been a clear downward trend in the ratio of house prices to average earnings over the last two years. Some cities to the north of England and Scotland are more affordable now when compared to 2007 but, with more scope for future house price growth, the price to earnings ratio is set to rise slowly in the coming years.”
Manchester is an affordable place to buy property for many buyers
For Manchester, the average price of property, as of July 2019, was £172,400 while the average income for this period was £28,800. The price to earnings ratio for Manchester was 5.9 times. There are areas in England with more affordable ratios, with Liverpool having a 4.4 ratio and Newcastle has a 4.5 ratio, but Manchester is a more affordable option than many of the leading English cities.
With convenient transport links to the centre of Manchester, and significant developments taking place, Stockport is the ideal place to buy, live or invest. As Stockport property specialists, we want to ensure you stay in touch with the latest property news. If you are looking for assistance in this area, give Spencer Harvey a call on 0161 480 8888 or send us an email at info@spencerharvey.co.uk. For a free valuation please visit: https://www.spencerharvey.co.uk/valuation-enquiry.html
Image by Baresi Franco