LONDON, November 13, 2018 /PRNewswire/ --
Property prices in cities across England, Scotland and Wales need to fall by an average of 36 per cent to £125,329 to make owning a home affordable for a single person earning an average wage.
The only place in that is affordable for a single person with an average salary for that city and a mortgage of 3.5 times salary is Durham according to research from Open Property Group.
Using average salary and house price data for cities, it can reveal Cambridge is the most overpriced place in England where prices would need to fall by 68 per cent for someone with a 20 per cent deposit earning an average wage to afford to buy.
It was closely followed by Chichester, where a drop of 67 per cent would be needed and Oxford, which would require a drop of 65 per cent.
At the other end of the country house prices in Durham could rise by 12 per cent and still be affordable for someone on an average wage with a 20 per cent deposit and a mortgage of 3.5 times salary.
Open Property Group Managing Director, Jason Harris-Cohen said: "Home ownership peaked in the UK in 2007. These figures show just how far out of reach the right of passage enjoyed by the Baby Boomer generation is for Millennials.
"The figures make stark reading for anyone hoping to get onto the property ladder. Successive Governments have tinkered around the edges of the housing market with the 'Help to Buy' scheme and stamp duty exemptions for first time buyers.
"But it has done very little to improve the real position of those looking to buy their first home and the market has priced many out of ever owning a home in the town or city they grew up in.
"The Government needs to address the issue by providing better employment opportunities in the North, more incentives for first time buyers and by increasing the supply of affordable new homes in the South.
"Naturally, if there is a better supply of available properties, prices could become more affordable as developers and home sellers compete to make their properties more saleable."
The Affordability Index
Least affordable with 20 per cent deposit and 3.5 x average salary mortgage Percentage drop for Affordable Actual house house price to be City house price price affordable Cambridge GBP139,742 GBP440,126 68% Chichester GBP122,176 GBP368,328 67% Oxford GBP139,291 GBP402,020 65% City of Westminster GBP342,961 GBP956,365 64% Brighton & Hove GBP130,979 GBP363,639 64% Bath GBP130,813 GBP335,481 61% Exeter GBP103,469 GBP256,442 60% St Albans GBP211,737 GBP502,956 58% City of London GBP306,998 GBP709,020 57% Bristol GBP118,484 GBP272,545 57%
Most affordable with 20 per cent deposit and 3.5 x average salary mortgage Percentage drop/increase Affordable Actual house for house price to be City house price price affordable Durham GBP112,941 GBP100,674 12% Stoke-on-Trent GBP101,325 GBP108,366 6% Stirling GBP165,121 GBP180,889 9% Sunderland GBP104,707 GBP114,755 10% Glasgow GBP113,444 GBP132,454 14% Liverpool GBP110,097 GBP128,960 15% Dundee GBP105,241 GBP125,599 16% Preston GBP106,663 GBP127,944 17% Lancaster GBP119,849 GBP147,906 19% Hull GBP91,004 GBP113,549 20%
Sources: ONS House Price Index June 2018 and ONS Labour market statistics for England, Scotland and Wales.
Assumptions - data for 49 cities was available and affordability is based on a single buyer with a lifestyle that would enable borrowing of 3.5 average salary by city. To calculate the affordability by city we have multiplied the average salary for that city by 3.5 times to get 80 per cent of the affordable price then added a deposit of 20 per cent to get the affordable house price.
For more information please visit www.openpropertygroup.com
About Open Property Group
Open Property Group are a professional house buying company and buy all types of vacant or let property throughout England and Wales.
OPG specialise in buy to let property purchasing which suit landlords who want to cash in property quickly without disrupting the tenants.
Homeowners benefit from a quick sell house fast process , with a completion date fixed to the owners' requirements. By selling directly, you pay no agent fees, and can plan ahead with certainty. We also pay your agreed legal costs too.