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UK cities property prices now over six times annual earnings

Taking average house prices across the UK, figures revealed in a report from Lloyds Bank show that prices have risen by 8% from the 2015 figure of £196,229 to a new 2016 average of £211, 880. This has meant that average affordability in the nation’s cities worsened in the last 12 months from 6.2 to 6.6 times gross average annual earnings, and it is the third successive year that this has happened.

Not unexpectedly, there is still a North/South divide which shows that 17 of the 20 least affordable cities are in the south of England only Lichfield, Leicester and York are outside of this region. London of course, has in the last five years seen the largest growth during the economic recovery, Winchester notched up the largest gains over the last ten years, the 20 most affordable cities lies outside of the southern region.

Whilst the affordability index is still not as high as the height of the last housing market boom in 2008, this saw the average house price to earnings at 7.2, but with house price rises and lack of wage growth seen over the last three years, that figure is not far away from the current 6.6, buying a house in the majority of UK cities is becoming more expensive and less affordable.

Naturally prices across the UK vary widely and Oxford is the least affordable city with an average house price of £364,429 putting it at 10.68 the gross average earnings. This is attributed to Oxford’s attractiveness to commuters working in London. Other cities with high affordability are: Winchester at 10.54, London at 10.06, Cambridge at 9.9 and Bath at 9.77, Lichfield at 7.53 and York at 7.5 making them the least affordable cities outside southern England.

On the other hand the most affordable cities include Londonderry in Northern Ireland and is now both the UK’s most affordable and least expensive city, the average property price in the Northern Ireland city is £113,302, which equates to 3.8 times the gross average annual earnings. Northern Ireland is also amongst the most affordable places to buy a home with Belfast at 4.42 and Lisburn at 4.64, elsewhere in the UK northern English and Scottish cities make up the remainder of the top 10 most affordable cities with Bradford at 4.31, Hereford at 4.55, Durham at 4.73, Lancaster at 4.89, Carlisle at 5.03, Glasgow at 5.07 and Stirling at 4.11.

Regeneration n some northern cities has accounted for house price growth, notable Salford at 48%, which has seen significant investment for regeneration, and Newcastle upon Tyne at 33%. However nothing compares with Winchester which has seen a rise of 79%.

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