Housing Purchase Affordability, UK: 2024

• The median house price to disposable household income affordability ratios were 7.9 in England, 5.4 in Wales, 5.3 in Scotland and 4.6 in Northern Ireland in Financial Year Ending (FYE) 2024.
• In FYE 2024, the median home sold for £290,000 in England, compared with £200,000 in Wales, £185,000 in Scotland and £168,000 in Northern Ireland; average disposable household incomes ranged from £35,000 to £37,000.
• In all four countries, affordability improved in FYE 2024 as ratios decreased compared with the previous year, but this does not change the long-term trend of homes generally being unaffordable in each country since FYE 2006.
• Northern Ireland's incomes have increased more quickly than house prices in each of the last five years, resulting in it being the only UK country where homes sold for less than five times average household income in FYE 2024.
• In Wales and Scotland, a median-priced home was affordable for the highest-income 40% of households, compared with the 10% highest in England (with the average London home being more than five times the highest 10% household income).
• Our new modelled local authority dataset shows that out of 317 local authority (LA) areas in England and Wales, 29 (9.1%) were affordable to those who worked there in FYE 2024, the highest since FYE 2004 (16.8%), but well below the start of the series in FYE 1999 (69.0%).

This release refers to ratios of house sales prices in an area to disposable household incomes (equivalised) for the same area. Also note:

• where we refer to average incomes or house prices, we are using the median
• house prices are sales prices that are not mix adjusted like in our House Price Index bulletin
• incomes are based on sample data from surveys, so we are not able to say if differences between areas or over time are statistically significant or a result of natural sample variation
• we use a threshold of five years of income as a broad indicator of affordability
• this release differs from our annual Housing affordability in England and Wales bulletin, which remains the official source to use for local housing policy and needs assessment; this bulletin focuses on household income instead of individual earnings, providing a UK-wide picture of a households rather than individuals' ability to buy a home at different income levels

More information on sources and methods is available in our Housing purchase affordability, quality and methodology information (QMI) report, or in Section 9: Data sources and quality.

This analysis is part of our Alternative measures of housing affordability research outputs article series, which is published alongside our Private rental affordability, England and Wales bulletin. These releases aim to complement our annual Housing affordability in England and Wales bulletin.

We value your feedback on this release. Please email us at better.info@ons.gov.uk with any suggestions you would like to make.

In the financial year ending (FYE) 31 March 2024, estimates of the median (average) house sales price and average disposable household income (equivalised) for each country were:

• in England, £290,000 for an average-priced home and £37,000 for average income (a ratio of 7.9)
• in Wales, £200,000 for an average-priced home and £37,000 for average income (a ratio of 5.4)
• in Scotland, £185,000 for an average-priced home and £35,000 for average income (a ratio of 5.3)
• in Northern Ireland, £168,000 for an average-priced home and £36,000 for average income (a ratio of 4.6)

Looking at recent changes:

• in all four countries, affordability improved in FYE 2024 as ratios decreased compared with the previous year
• Northern Ireland's incomes have increased more quickly than house prices in each of the last five years, resulting in it being the only UK country where homes sold for less than five times the average household income in FYE 2024

We are not able to assess if changes were statistically significant.

Looking in more detail over time:

• housing affordability ratios generally worsened from the start of the series up to FYE 2007 or FYE 2008 in all four countries of the UK
• following the FYE 2008 financial crisis, and up to around FYE 2013, affordability ratios improved substantially in Northern Ireland, and modestly in the other three countries
• from FYE 2013 to FYE 2019, affordability ratios in each country were either broadly stable, or worsened slightly
• since FYE 2019, trends have been different in all four countries
• the ratios in England and Wales have been volatile from FYE 2019 to FYE 2024, which limits year-on-year comparisons; however, the ratio in England in FYE 2024 re-aligned with trends from FYE 2017 to FYE 2020

In last year's bulletin, Section 4: Changes in house prices and household incomes, we showed that changes in house prices are the main cause of the change in affordability with patterns similar this year. For example, between the start of the series in FYE 1999 to FYE 2024, house prices in Wales roughly quadrupled, while household incomes roughly tripled.

Additional sources covering this time period can be used to put these affordability trends in context. For example, some 37% of adults in Great Britain told us they found it very or somewhat difficult to afford their rent or mortgage payments (27 March to 7 April 2024) according to our Public opinions and social trends data.

This release provides distributions of household income estimates and house price figures (deciles). We do this to show that the affordability of an average home differs depending on where a household lies on the income distribution (as shown in Figure 2).

Figure 2 shows that in financial year ending (FYE) 2024:

• in England, only the highest-income decile could afford an average-priced home with fewer than five years of income
• in Wales and Scotland, the top-income 40% (four deciles) could afford an average home
• in Northern Ireland, an average home was affordable with an average or higher income
• an average-priced home in England was 13 times a lower-income household's income (the lowest-income 20%), compared with 9.2 times in Wales, 7.8 in Scotland and 7.5 in Northern Ireland

Alternatively, users may wish to compare a low household income with a low house price (for example, 20th percentile incomes with 20th percentile homes). This has the advantage of reflecting that households with a lower income may be looking to purchase homes that are lower priced; but may ignore the fact that many low-priced homes only have one bedroom, which may not be suitable for all low-income families.

Figure 3 shows that:

• overall, there is more variation between countries than within them, with worse affordability across the income distribution in England, compared with other countries
• in Wales and Northern Ireland, there is relatively little difference in affordability across the distribution
• in Scotland, the lower-income and house price deciles are more affordable, with house prices being less than five times household incomes for the lowest four deciles using this measure
• all points of the distribution were unaffordable in England and Wales

There is a wide variation in both household income estimates and house prices within England in financial year ending (FYE) 2024.

Figure 4: The least affordable regions – London and the South East – also had the widest differences in affordability between high- and low-income households

Housing affordability ratio for average household income and average house prices by region, financial year ending (FYE) 2024

Figure 4 shows that:

• in London, an average home was unaffordable (more than five times income) for any household income decile; in three other regions, the average home was only affordable to the top income decile
• the North East, the most affordable region, had average house prices that were affordable for the highest-income four deciles (40%)
• an average-priced home in the North East cost the equivalent of 8.5 years of income for a low-income household (20th percentile), compared with 25 years in London

Analysis in last year's bulletin, Section 6: affordability across the regions of England, compared low household incomes to average house prices by region, over time. Patterns remain consistent this year, for example, this showed that even in the most affordable area, the North East, an average-priced house has been equivalent to more than five times a low household income since the start of the series.

Our Median House Price and Sales Volume update provides local authority level house sales prices for England and Wales. There are no official regular estimates of household income by local authority, but for this release we have modelled them using local-authority level estimates of workers' earnings, so we can publish the resulting affordability ratios.

These are official statistics in development using modelled median disposable household incomes for workers in local areas in England and Wales. Caution should be used, especially when looking at year-on-year changes, as this modelling introduces additional uncertainty, and we cannot say if differences are statistically significant. The method is described further in our Housing purchase affordability, quality and methodology information (QMI) report, and in Section 9: Data sources and quality.

In financial year ending (FYE) 2024:

• out of 317 local authority (LA) areas in England and Wales, 29 (9.1%) were affordable (a ratio of less than five) to those who worked there
• this was the highest proportion of local authorities in twenty years (since FYE 2004)
• this compares with two-thirds (69.0%) of LAs for which data are available being affordable at the start of the series in FYE 1999, and around a sixth (16.8%) in FYE 2004 when data for all LAs are available
• the most affordable LA was Blaenau Gwent in Wales (where an average home cost 3.6 times an average household income)
• the least affordable was Kensington and Chelsea (where an average home cost 35.5 times an average household income)

Figure 5: Wales and the North East were more affordable than other English regions, and had the smallest range of ratios

Range of affordability ratios in local authority English regions and Wales, financial year ending (FYE) 2024

Figure 5 shows that in FYE 2024:

• there were no affordable LAs in four regions - East of England, London, South East and South West
• two-fifths of LAs in the North East and Wales (42% and 41%) were affordable
• the North East had the lowest range of affordability ratios (a difference of 2.1 years of income between the most and least affordable LAs), and London the highest (26.1 years)
• the most affordable LA in London was Tower Hamlets, with a ratio of 9.4; all other areas in London had ratios of 12 of higher

Figure 6: Homes are least affordable in and around London, commuter areas, and some areas with National Parks

Housing purchase affordability ratios, by local authority, England and Wales, financial year ending (FYE) 1999 to FYE 2024

Figure 6 shows that in FYE 2024:

• of the 10 most affordable LAs, four were in the North West, four in Wales, and one in each of the North East and Yorkshire and the Humber
• the top 17 least affordable LAs were in London
• the LAs with the highest ratios outside of London were typically commuter areas near London (such as St Albans and Elmbridge) or that contain a large area of National Park or National Landscape (such as Chichester and Cotswolds)
• there are three clusters of LAs that were affordable - one in South Wales, one in West Lancashire, and another between Newcastle and Hartlepool

50th percentile or the median

A point at the middle of a distribution - the income or house price at which half fall below and half fall above. This is a more useful measure of an average than the mean where a distribution is skewed, as is the case with both income and house prices.

Disposable household income

Also known as net income, disposable income is the amount of money that households have available for spending and saving after direct taxes (such as Income Tax, National Insurance and Council Tax) have been accounted for. It includes earnings from employment, private pensions and investments as well as cash benefits provided by the state (including State Pension).

Equivalised income

Income data have been equivalised using the Organisation for Economic Co-operation and Development equivalisation scale with the reference point of a household consisting of two adults and no children. Equivalisation compensates for the different number and broad age group in each household, to allow for some households needing more income than others. Equivalisation is explained further in our How accounting for differences in need for public services impacts UK income inequality statistics article.

Mix-adjusted

Mix-adjustment is commonly used to compensate for different types of homes being in the data each year. The house price statistics used in this publication do not make this adjustment. However, our UK House Price Index (HPI) does mix-adjust, using a hedonic regression model. This allows the same types of property to be compared over time, meaning the change in average price is comparable over time in the UK HPI. More information can be found in the HM Land Registry UK HPI report.

Housing affordability estimates are calculated by dividing house prices by estimated incomes to create a ratio. Further details are available in our Housing Purchase affordability, UK, quality and methodology information (QMI).

This release uses the following sources:

• house sales prices for England and Wales are from the Price Paid Data from HM Land Registry, consistent with our Housing affordability in England and Wales datasets
• house sales prices for Scotland are from the Annual property market report from Registers of Scotland (RoS)
• house sales prices for Northern Ireland are from a custom data supply from the Department of Finance's Land and Property Services
• incomes prior to 2018 were estimated from our Living Costs and Food Survey (LCF), from three-year averages
• incomes from 2018 were estimated from single years of the Household Finances Survey (HFS), weighted and adjusted consistently with our Average household income, UK series, and The effects of taxes and benefits on household income, disposable income estimate dataset

Neither house sales prices nor income estimates for previous years are adjusted for inflation - we compare all house sales prices and all incomes that occurred in a given year. We also incorporate revisions to house prices in each edition, some of which occurred many years in the past. Neither data source includes the population in communal establishments or accounts for the effect of shared equity schemes available in England, Wales, Scotland and Northern Ireland.

The strengths of our approach are that:

• comparable affordability statistics are produced for the whole UK, which is rare given that housing is a devolved policy area
• household income measures provide a more realistic assessment of the homes a household can afford than individual earnings measures, as used in our Housing affordability in England and Wales statistical bulletins series
• we can compare affordability at different points on the income and house price distribution

The limitations of our approach are that:

• comparing average purchase prices to income does not take account of upfront costs, such as fees and surveys, or deposits, nor does it take into account any impacts on housing cost affordability resulting from changes to mortgage interest rates and payments
• because we are using different national data sources, we are unable to calculate an affordability ratio for the UK as a whole
• these statistics are an indicator of changes in housing purchase affordability on average, over time and for a whole country or region, but we are unable to match individual household incomes and house prices
• house prices are not adjusted to represent a typical mix of what is available in an average period, unlike those in our UK House Price Index
• incomes are estimated through sample surveys, with statistical uncertainty and additional uncertainty from cost-of-living payments being made in the financial year ending 2023, and the effects of the coronavirus (COVID-19) pandemic.

Local authority incomes

To create the local-authority-level incomes, we have used earnings estimates from our Employee earnings in the UK: 2024 bulletin, which uses data from the Annual Survey of Hours and Earnings (ASHE) to scale the HFS incomes. The data are classified as accredited official statistics, and are based on Pay As You Earn (PAYE) data provided by employers. PAYE, and therefore ASHE, does not cover self-employment income or income from other sources, such as pensions, property rental, and investments. We must therefore assume that earnings and income levels have the same relationship in each area.

For each local authority, the respective HFS regional income is multiplied by the local authority (LA) to region ratio of earnings from ASHE to derive a modelled income. Unlike previous releases, the ASHE earnings for the modelled income are made from an average over two years. This was to better match the other sources' time scale. This income is then divided by the median house price figure for the local authority to arrive at an affordability ratio.

For example, Hartlepool local authority in the North East. The average disposable household income in the North East in Financial Year Ending (FYE) 2024 was £ 32,362 per annum. The annual ASHE LA earnings for Hartlepool was £32,313 in 2023 and £32,947 in 2024, giving average earnings of £32,630. The ASHE Regional earnings for the North East was £31,104 in 2023 and £32,960 in 2024, giving average earnings of £32,032.

In FYE 2024, the median house price in Hartlepool was £150,396. On a modelled disposable household income of £32,966, this makes house prices 4.6 times higher than modelled disposable household income. This means Hartlepool in FYE 2024 was affordable, as this is below the 5.0 threshold.

The resulting modelled incomes therefore come with additional uncertainty, over and above that of the regional income estimates. Further quality information is available in our ASHE, Low pay and ASHE pension results QMI.

Alternative ways of calculating affordability including for Local Housing Needs Assessments

Our Local Authority estimates produced as part of the separate Housing Affordability in England and Wales bulletin remain the recommended and official source of local authority affordability data to be used as part of the Local Housing Needs Assessment and policy formation. However, we hope that this publication can aid the public, researchers, local authorities and others to better understand household housing affordability.

Users may want to use this release to focus on distributions of incomes and house prices, or to calculate further measures using our extensive Median House Price and Sales Volume update - Housing affordability in England and Wales datasets, which can be used to calculate median affordability for specific property types, or look at house prices for new or existing dwellings.