According to Nationwide Building Society, London's house price-to-earnings ratio stands at 8.0, leading the UK, while Scotland remains at the lowest with 3.0. First-time buyers allocate an alarming 36% of their income to mortgage payments. Although last year saw some improvement in affordability, with earnings growth slightly surpassing house price rises, challenges persist. With 40% of new buyers needing family support for mortgages, experts highlight the importance of sustainable housing solutions to address supply and demand imbalances, notably in northern regions gaining traction due to more reasonable pricing.
Nationwide's report revealed that around 40% of first-time buyers in 2023-24 relied on financial support from family, friends, or inheritance to secure a mortgage.
A prospective buyer earning the average UK income and purchasing a first-time buyer property with a 20% deposit would face mortgage payments equal to 36% of their take-home pay, well above the long-run average.
Andrew Harvey, senior economist at Nationwide, noted a slight easing in affordability pressures over the past year, driven by earnings growth outpacing house price increases.
Toby Leek highlighted the growing interest in northern regions and Scotland, driven by their relative affordability, and called for sustainable housing development.
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