Wages have increased at a higher than property values in over half the local authority areas in the UK since the financial crash, new research shows.
According to Yorkshire Building Society, homes in 54% of local authority areas – including Edinburgh, Birmingham, Peterborough, Leeds and Harrogate – have seen wages outpace house price growth over the past 10 years.
The building society said that the data showed a distinct divide between the north and south of the country when it comes to housing affordability.
Affordability has worsened most dramatically for London borrowers, where buying the average home is now less affordable in every borough than it was before the credit crunch, dropping on average by 39%.
The biggest improvements in affordability have come in the North East of England where affordability has increased by an average of 26%, followed by Scotland (20%), Wales (18%), the North West (16%), and Yorkshire and the Humber (14%).
Andrew McPhillips, Yorkshire Building Society chief economist, said: “Across London and large swathes of southern England, which were already some of the most unaffordable parts of the country, it has become increasingly difficult for first-time buyers and those wanting to move up the housing ladder to be able to buy their first or next home.
“However, the north of England, Wales and Scotland present a different picture entirely, with many places, such as Edinburgh, Peterborough and Birmingham, becoming more affordable than they were before the credit crunch.
“While some northern cities, such as Manchester, are less affordable than they were in 2007, in much of the north of England, Scotland and Wales, the gap between earnings and house prices is around a third of the average for London.”
Most affordable local authority areas
| Local Authority Area | Region | Current house price to earnings ratio | House price to earnings ratio 2007 | Change in affordability since 2007 | Current average house price | Average house price in 2007 |
| East Ayrshire | Scotland | 3.10 | 4.55 | +31.8% | £91,024 | £107,124 |
| Copeland | North West | 3.12 | 3.66 | +14.7% | £123,086 | £118,925 |
| Burnley | North West | 3.15 | 4.78 | +31.2% | £77,629 | £94,174 |
| West Dunbartonshire | Scotland | 3.44 | 5.29 | +34.9% | £95,074 | £109,128 |
| Blaenau Gwent | Wales | 3.46 | 4.86 | +28.8% | £79,611 | £90,502 |
Least affordable local authority areas
| Local Authority Area | Region | Current house price to earnings ratio | House price to earnings ratio 2007 | Change in affordability since 2007 | Current average house price | Average house price in 2007 |
| Westminster | London | 24.06 | 15.43 | -55.9% | £1,034,073 | £539,759 |
| Hammersmith and Fulham | London | 20.16 | 14.79 | -36.3% | £782,262 | £500,410 |
| Camden | London | 19.94 | 13.84 | -44.1% | £809,408 | £485,507 |
| Haringey | London | 17.51 | 10.93 | -60.2% | £554,910 | £318,233 |
| Islington | London | 17.37 | 12.54 | -38.5% | £648,294 | £408,718 |
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