Housing affordability in the UK has worsened notably since 2020, with the share of income spent on mortgage rising for first-time and repeat buyers. In 2023, homebuyers spent, on average, 20.6 percent of their income on mortgage payments, 4.4 percentage points higher than in 2020. This increase was higher for first-time buyers than for repeat buyers. House prices have soared since the COVID-19 pandemic, followed by a dramatic increase in interest rates. As fewer people can afford to buy a home, the number of mortgage approvals for house purchase has dropped.

The house price ratio in the United Kingdom (UK) increased in the third quarter of 2024, after falling for the past two years. The ratio measures the development of housing affordability and is calculated by dividing nominal house price by nominal disposable income per head, with 2015 set as a base year when the index amounted to 100. The UK's index score in the third quarter of 2024 amounted to 109.2, which means that house price growth has outpaced income growth by nine percent since 2015. This was close, but still lower than the Euro area 17 average.

Affordability ratios calculated by dividing house prices for newly-built dwellings, by gross annual residence-based earnings. Based on the median and lower quartiles of both house prices and earnings in England and Wales.

This statistic shows the ratio of house prices to household income in the United Kingdom from 1976 to 2016. In 1976 the ratio of house prices to household income was 2.64. This has risen to 4.54 in 2016. The lowest ratio at any point in this statistic was 2.23 in 1996.

Affordability ratios calculated by dividing house prices for newly-built dwellings, by gross annual workplace-based earnings. Based on the median and lower quartiles of both house prices and earnings in England and Wales.

In the 3rd quarter of 2024, the debt of households in the United Kingdom amounted to 120 percent of their income. This indicator shows the average level of indebtedness of the the general population and their ability to repay their debts. The total value of household debt (total liabilities and loans to households) has increased annually since 2000. Debt to income ratio increased during the pandemic As we have seen here, households have been decreasing their indebtedness levels in the past years. However, the volume of new consumer lending actually soared between 2022 and 2024. Meanwhile, the growth rate of mortgages in the UK has remained lower these past years, but it has also shown an increase on amount of lending.

Indebtedness in Europe The household debt of many countries in Europe as a share of their disposable income in 2024 was over 100 percent. That was mostly the case for Northern and Western European countries, such as Norway, the Netherlands, and Denmark. Germany and Austria were some of the largest exceptions, as they were among the few countries in that part of Europe with households' debt representing less than 80 percent of hteir income.

Since 2015, the gap between the cost of buying a home and renting has grown, with homeownership becoming increasingly less affordable. In the third quarter of 2024, the house price to rent ratio in the UK stood at 114.6. That meant that house price growth has outpaced rental growth by nearly 15 percent between 2015 and 2024. The UK's house price to rent ratio was slightly below the average Euro area ratio. House price to income ratio in the UK Another indicator for housing affordability is the house price to income ratio, which is calculated by dividing nominal house prices by the nominal disposable income per head. The ratio saw an overall increase between 2015, which was tthe base year, and 2022. After that, the index declined, but remained close to the average for the Euro area. Is it more affordable to rent or buy? There are many things to be considered when comparing buying to renting, such as the ability to qualify for a mortgage and whether prospective homebuyers have sufficient savings for a deposit. Generally, purchasing a home is more affordable than renting one. However, the average monthly savings first-time buyers can achieve have been on the decline. In East of England, where house prices have increased rapidly over the past few years, it was cheaper to rent than to buy in 2022.

Portugal, Canada, and the United States were the countries with the highest house price to income ratio in 2023. In all three countries, the index exceeded 130 index points, while the average for all OECD countries stood at 117.5 index points. The index measures the development of housing affordability and is calculated by dividing nominal house price by nominal disposable income per head, with 2015 set as a base year when the index amounted to 100. An index value of 120, for example, would mean that house price growth has outpaced income growth by 20 percent since 2015. How have house prices worldwide changed since the COVID-19 pandemic? House prices started to rise gradually after the global financial crisis (2007–2008), but this trend accelerated with the pandemic. The countries with advanced economies, which usually have mature housing markets, experienced stronger growth than countries with emerging economies. Real house price growth (accounting for inflation) peaked in 2022 and has since lost some of the gain. Although, many countries experienced a decline in house prices, the global house price index shows that property prices in 2023 were still substantially higher than before COVID-19. Renting vs. buying In the past, house prices have grown faster than rents. However, the home affordability has been declining notably, with a direct impact on rental prices. As people struggle to buy a property of their own, they often turn to rental accommodation. This has resulted in a growing demand for rental apartments and soaring rental prices.

This dataset contains the ratio of lower quartile/median house price to lower quartile/median earnings in England

Affordability ratios calculated by dividing house prices by gross annual workplace-based earnings for former local authorities.

Expenditure on rent by renters and mortgages by mortgage holders, by region and age from the Living Costs and Food Survey for the financial year ending 2022. Data is presented as a proportion of total expenditure and a proportion of disposable income.

The cost-to-income ratio of the United Kingdom (UK)-headquartered Nationwide Building Society fluctuated overall between 2011 and 2024, peaking at 75.9 percent in 2020. After declining to its lowest point in 2023 at 41.9 percent during this period, by 2024 it slightly increased and stood at 51.9 percent.

This dataset contains quarterly median capital and interest payments as a percentage of income for first time buyers in England

This dataset contains quarterly median capital and interest payments as a percentage of income for first time buyers in England. The data is owned by the Council of Mortgage Lenders (CML)and permission has been given to publish to ODC.

The price-to-earnings ratio for first-time buyers in the United Kingdom was the highest in London and the lowest in Scotland in the fourth quarter of 2024. In London, the average house bought by first-time buyers was about 8.4 times higher than the mean gross earnings in the region. In Scotland, this figure amounted to 3.16.

The house price to income index in Europe declined in almost all European countries in 2023, indicating that income grew faster than house prices. Portugal, Luxembourg, and the Netherlands led the house price to income index ranking in 2023, with values exceeding 125 index points. Romania, Bulgaria, and Finland were on the other side of the spectrum, with less than 100 index points. The house price to income ratio is an indicator for the development of housing affordability across OECD countries and is calculated as the nominal house prices divided by nominal disposable income per head, with 2015 chosen as a base year. A ratio higher than 100 means that the nominal house price growth since 2015 has outpaced the nominal disposable income growth, and housing is therefore comparatively less affordable. In 2023, the OECD average stood at 117.4 index points.

Affordability ratios calculated by dividing house prices for existing dwellings, by gross annual residence-based earnings. Based on the median and lower quartiles of both house prices and earnings in England and Wales.

Affordability ratios of house prices to small area model-based income estimates covering local areas, called Middle layer Super Output Areas (MSOAs) in England and Wales.

This statistic shows the average mortgage payments in 2004, 2009 and 2014 in the United Kingdom (UK) as a percentage of total disposable income. It showed that the average percentage has varied noticeably in this time period. Although the mortgage payments as a share of disposable income in the UK dropped by around 2 percent between 2004 and 2009, they then increased by almost seven percent by 2014.

Price to Rent Ratio in the United Kingdom decreased to 114.58 in the third quarter of 2024 from 116.11 in the second quarter of 2024. This dataset includes a chart with historical data for the United Kingdom Price to Rent Ratio.

Kensington and Chelsea was the least affordable area to buy a home in London, England in 2022, followed by Westminster. Prospective home buyers in Kensington and Chelsea would have to spend over 34 percent of the median income to buy a median priced property. On the other end of the scale were Barking and Dagenham and Bexley where the price to income ratio was about 10 percent. These were also the areas with the lowest house price.