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Rising House Prices and Landlord Costs Intensify Homeownership Challenges

A new study has highlighted significant challenges for landlords and aspiring homeowners alike, as escalating house prices in England continue to outpace income growth, making the dream of homeownership increasingly difficult to achieve in several regions.

The London Borough of Barking and Dagenham has experienced the most dramatic decrease in homeownership affordability, according to analysis by The data, sourced from the Office for National Statistics (ONS), shows that in this borough, house prices have more than doubled to £380,000 while wages have only seen a minimal increase of £2,182. This disparity has resulted in a 100.73% surge in the house price-to-earnings ratio, the highest recorded in the study.

Regional Variations Highlight Wider Trends
While London remains the most unaffordable region, with an average home costing nearly twelve times the yearly earnings, the East Midlands recorded the largest regional decline in affordability. Here, the house price-to-income ratio rose by 35.58% to 7.43. Conversely, the North East emerged as the only region where wages have increased faster than house prices, making it relatively more affordable to buy a home compared to a decade ago.

Top Areas Where Affordability Has Declined
Following Barking and Dagenham, Hillingdon and Waltham Forest are other London boroughs where homeownership has slipped further out of reach. In Hillingdon, house prices surged by £230,000 with only a £143 rise in median income, increasing the house-to-earnings ratio by 85.98%. Waltham Forest saw its ratio increase by 70.76% as house prices doubled to £520,000. Outside London, Oadby and Wigston, and Gedling in Nottinghamshire also ranked high for decreased affordability, with significant gaps between income growth and rising house prices.

David Burrows, Head of, reflected on the findings: “Approximately 303 local authorities across England have seen house prices rise at a higher rate than wages over the last decade, with the affordability of buying a home falling significantly in four London boroughs. This study shines a spotlight on the areas in which housing affordability is increasingly becoming more of a problem. With house prices falling at the start of 2024, it will be interesting to see whether purchasing a home becomes more of a possibility for aspiring homeowners across England over the next decade.”

Landlords should be prepared as market dynamics evolve. Whether you’re looking to expand your portfolio or manage existing properties, understanding the impact of changing house prices and economic conditions on your investment is crucial. For more insights and updates on the property market, subscribe to our newsletter and ensure you never miss out on crucial information that could affect your decisions as a landlord.