House price inflation in the UK might have slowed in recent months, but housing still reached its least affordable level on record in 2016, according to official data.
Working people in England could expect to pay 7.72 times times their annual earnings to buy a home last year, up from 7.52 in 2015. The so-called “affordability ratio” has more than doubled since the Office for National Statistics began collecting data on the subject in 1997, when the average home cost only 3.54 times earnings.
House prices in England and Wales increased by an average of 5.4 per cent over the year, while average earnings increased only 2.4 per cent. Since 1997 average prices have risen 258 per cent, compared to a 68 per cent increase in earnings.
The London borough of Kensington and Chelsea was the least affordable local authority in the country, with houses costing an average of 38.5 times more than local annual earnings.
The most affordable part of the country, in contrast, was Copeland in Cumbria, where locals can buy a property for only 2.8 times earnings.