House prices compared to salaries have become more affordable, with the average home now costing 7.3 times the average household income, down from 7.6 last year according to Lloyds Banking Group data. This marks the lowest ratio since 2015 due to slow house price growth; property prices increased by only 0.5% to £299,131 while earnings rose 4.5% to £40,790. First-time buyers now face an average cost of less than six times their income compared to 6.1 last year. Regions like Scotland and northern England offer the best affordability nationally, with Inverclyde and Aberdeen leading at a ratio of just 3.5 times earnings.
Written locally by qwen2.5:14b on 2026-10-02,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
According to Lloyds Banking Group’s analysis using its house price index and Office for National Statistics figures, housing affordability has reached its most favorable level since 2015. The ratio of average home prices to household incomes dropped from 7.6 to 7.3 in the year leading up to April-June 2026, with no quarter showing a lower ratio in over a decade. Nationally, while property values slightly increased by 0.5%, earnings rose by 4.5%—significantly outpacing home price growth and narrowing the affordability gap.
First-time buyers now face an average cost of just under six times their earnings, down from 6.1 to 5.9. Notable improvements in affordability were seen in traditionally expensive regions: London’s ratio fell from 10.9 to 10.3, Eastern England's decreased from 8.7 to 8.2, and the South West saw a drop from 8.2 to 7.7.
Despite these improvements, London and the South East remain among Britain’s least affordable areas for homebuyers. Scotland and northern England have many of the most affordable local authorities, with Inverclyde standing out as particularly accessible.
Written for “UK Housing Affordability” on 2026-10-05,
grounded in this article and the 1 other(s) covering the same event.
House prices have become more affordable in relation to salaries, data from Lloyds Banking Group shows.
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data → become → Group
The average home now costs 7.3 times the average household income, down from 7.6 a year ago, Lloyds said.
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Lloyds → cost → 7.6
The ratio has reached its lowest level since 2015, driven by slow house price growth.
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ratio → reach → growth
Nationally, the average property price edged up 0.5 per cent in the past year, to £299,131, while average earnings increased by 4.5 per cent to £40,790, narrowing the gap.
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earnings → edge → gap
For first-time buyers, homes now cost less than six times earnings, falling from 6.1 to 5.9.
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homes → cost → 5.9
Conventionally unaffordable regions have seen some of the largest improvements in house price to income ratio, though London and the south-east of England remain the most expensive places to buy.
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London → see → England
Scotland and northern England feature many of Britain's most affordable local authorities, led by Inverclyde and Aberdeen, according to the research.
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Scotland → feature → research
The gap between house prices and earnings has narrowed, new data shows
Where are the most affordable locations in each region?
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locations → narrow → region
At a local authority level, significant differences in house price affordability remain.
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differences → remain → affordability
Many of the lowest house price to earnings ratios are found in Scotland and northern England.
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Many → find → Scotland
These are the locations where buyers are likely to get more for their money.
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buyers → get → money
Inverclyde and Aberdeen in Scotland are the most affordable locations, with the average home costing 3.5 times earnings in both areas.
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home → cost → areas
The next cheapest locations are Kingston upon Hull in Yorkshire and the Humber, as well as Blackpool and Dundee, where homes cost 3.6 times earnings.
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homes → cost → earnings
At the other end of the scale, Elmbridge in Surrey remained the least affordable local authority with a house price-to-income ratio of 17.4.
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Elmbridge → remain → 17.4
Kensington and Chelsea in London followed at 17.3, while St Albans ranked third at 14.1.
Lloyds
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Albans → follow → 14.1
said: 'Several traditionally expensive areas recorded some of the largest improvements in affordability, including Westminster (London), where the ratio fell from 15.2 to 13.3; Cambridge (Eastern England), from 11.4 to 10.0; Elmbridge (South East), from 18.7 to 17.4; and New Forest (South East), from 10.1 to 8.7.
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ratio → say → 8.7
Conversely, several more affordable areas saw their ratios increase.
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ratios → see → ?
Rossendale recorded the largest increase from 4.8 to 5.4, while Wrexham in Wales increased from 4.9 to 5.5 and Halton from 5.1 to 5.6.
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Wrexham → record → 5.6
Buyers looking for a more affordable option in the south-east of England should consider Portsmouth, where the house price to income ratio is 5.2 and the average cost of a home is £216,713.
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cost → look → home
Asaam said: 'Where you buy continues to make a huge difference to affordability.
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buy → say → affordability
Our recent research showed homebuyers can save 28 per cent on average by looking just next door to the UK’s priciest postcodes.
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homebuyers → show → postcodes
Mortgage rates rising
The data will be of little comfort to buyers facing higher borrowing costs as mortgage rates increase.
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rates → rise → costs
Households are being hit with a fresh wave of mortgage rate hikes this week as lenders prepare for higher inflation and interest rates.
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lenders → hit → inflation
Higher interest rates mean average monthly mortgage repayments have increased from an average of £1,100 to £1,157 over the past year according to Lloyds.
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repayments → mean → Lloyds
The average first-time buyer mortgage payment now accounts for around 34 per cent of income, compared with 41 per cent for those renting.
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payment → account → those
And in some parts of the UK potential buyers are still being kept out of the housing market due to house prices being much higher than average incomes.
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prices → keep → incomes
Andrew Asaam, mortgages director at Lloyds, said: 'There are some encouraging signs for people looking to buy a home.
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Asaam → say → home
Wages have continued to rise while house prices have remained relatively stable, helping to narrow the gap between earnings and house prices.
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prices → continue → earnings
'However, affordability remains stretched for many households.
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affordability → remain → households
Mortgage rates are higher than they were a year ago and saving for a deposit continues to be one of the biggest barriers facing first-time buyers.
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saving → save → buyers
'Buyers may have more options than they realise, including mortgages designed for those with smaller deposits.'
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they → have → deposits
Ian Harris, president of NAEA Propertymark, said: 'While the narrowing gap between house prices and earnings is encouraging, affordability on paper does not always translate into affordability at the point of purchase.
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affordability → say → purchase
'Buyers are still facing higher borrowing costs and the challenge of raising a deposit, with many having to compromise on property type, location or budget.'
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many → face → type
The Aporia
