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UK's most and least affordable areas to live

·Finance Reporter, Yahoo Finance UK
·3-min read
house prices UK
In Kensington and Chelsea average house prices exceed £1m. Photo:Stefan Wermuth/Reuters/

The exclusive borough of Kensington and Chelsea remains the most expensive place in the UK to live, with East Ayrshire in Scotland showing up as the most affordable, Nationwide Building Society research shows.

Within London, the borough of Kensington and Chelsea remains the least affordable place in the capital to live, when taking into account factors like house prices and average earnings.

In other areas of the country, Oxford, Hertsmere, Cotswold, Rutland, Ryedale and Malvern Hills all stand out for being more expensive places to live than neighbouring areas.

In Kensington and Chelsea, the typical house price is 14.7 times earnings, as average property prices start in the £1m range.

House prices in Oxford have risen 14% over the past year, one of the strongest increases in the South East. A property in this area costs 10.1 times the average earnings in the region, up from 9.2 just a year ago.

The figures also show that most areas in the South West have seen a deterioration in affordability over the last year. Cotswold has a house price to earnings ratio of 8.6.

Read More: UK house prices climb 10% in November

At the other end of the spectrum, East Ayrshire, in Scotland, is the most affordable place to live, with average first-time buyer houses just 2.4 times average earnings, according to Nationwide Building Society.

This region covers a large area to the south of Glasgow, but its main towns are Kilmarnock and Cumnock.

Copeland, County Durham, Merthyr Tydfil, Barnsley, Stoke-on-Trent, Bolsover, Great Yarmouth, Swindon, Southampton are all high on the list of most affordable local authorities.

Bromley is the most affordable borough in London, though its house price earnings ratio of 7.4 is still higher than most areas around the country. In fact, Bromley is less affordable than the least affordable authorities in seven out of the 11 regions.

Overall, 25% of local authorities have seen an improvement in affordability since 2016 but gaps between least and more affordable boroughs are becoming more stretched across all regions.

“London has by far the greatest gap between the least and most affordable boroughs, while the North East has the smallest,” Andrew Harvey, senior economist at Nationwide Building Society, said.

In terms of areas that have seen the greatest improvement in affordability ratios between 2016 and 2021, Westminster comes out on top.

The London borough has seen the biggest improvement in affordability over the period, with the average first time buyer house price to earnings ratio falling from 18.1% to 14.3%.

Read more: 10 ways to increase the value of your home for under £500

“This was driven by a comparison of lower prices, 13% lower than five years ago, and higher earnings, up 10% compared with 2016,” Harvey said.

Meanwhile, first-time buyer house price earnings ratios have risen in 72% of authorities, with a “noticeable increase” in the proportion of boroughs with higher ratios over the past five years.

“This helps illustrate the challenge that many first-time buyers across the country face, in terms of raising a deposit to purchase their first home,” Harvey commented.

In the third quarter of 2021 the average first-time buyer bought a home worth £223,715, borrowing £172,106 — 77% of the value, according to the Office for National Statistics.