Cheap towns, costly mortgages: what Britain's affordability data means for brokers - Mortgage Professional America
By Google News Personal Finance ·
Zoopla maps 36 towns where homes cost less than twice household earnings, yet rate pressures still shut buyers out
A home in Shildon, County Durham, costs £73,600. That is less than many London renters pay in a single year. By Zoopla's measure, it makes Shildon Britain's most affordable town, sitting at 1.15 times local earnings.
Nationally, the average home costs 4.3 times household earnings — £299,100 against an average household income of £69,600. On paper, that looks like a solved housing crisis. In practice, mortgage professionals know it is nowhere near that simple.
Zoopla's analysis of 929 towns across Great Britain found 36 locations where a typical home is worth less than twice the combined annual earnings of two local full-time workers. Scotland accounts for 23; the North East contributes eight, the North West four, and Wales one.
The geography is not surprising. What is worth unpacking, for brokers and advisers working with first-time buyers (FTBs) and home movers, is what this data tells us — and what it doesn't.
The price-to-earnings ratio is a useful headline measure, but it strips out the two things that matter most in a mortgage conversation: the cost of credit and the availability of a deposit.
Richard Donnell, executive director at Zoopla, acknowledged as much: "House prices have been rising more slowly than incomes, helping to improve housing affordability, but higher mortgage rates continue to offset some of these gains by increasing the monthly cost of buying a home."
The income-to-price gap may be closing in County Durham and coastal Aberdeenshire, but a buyer borrowing against a £73,600 property at current rates still faces a meaningfully higher monthly repayment than the same buyer would have three years ago. Affordability ratios have…
Originally published by Google News Personal Finance
