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ONS: UK Housing Purchase Affordability 2023: "Even Elon Musk would think twice about buying in the capital"

ended 09. December 2024

The ONS has just published a report entitled, Housing Purchase Affordability, UK: 2023. It reveals that the average annual disposable household income was £35,000 during the financial year ending (FYE) 2023 in England; the average house price was £298,000, which is the equivalent to a ratio of 8.6 years of household income. Meanwhile, the average house price to disposable household income ratios were 5.8 in Wales, 5.6 in Scotland and 5.0 in Northern Ireland in FYE 2023. In London, the average home was not affordable for any household income decile; in three other regions, the average home was only affordable to the top decile. Other key points below. Newspage asked property and mortgage experts for their views, bottom. 

  • Since this series began, house prices have increased twice as quickly as household incomes in England; house prices in Wales and Scotland have also increased more rapidly than incomes, but the differences are more moderate.
  • For low-income households, average-priced homes in all four countries have been "unaffordable" (costing more than five years of income) throughout the series.
  • Only the 10% highest-income households in England could afford an average-priced home with fewer than five years of household income in FYE 2023; in Wales this was the top 30%, the top 40% in Scotland, while in Northern Ireland an average-priced home was affordable with an average household income

11 responses from the Newspage community

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Iain Swatton
Director at Exemplar Financial Services
The ONS figures lay bare the harsh reality that, for millions, the dream of owning a home is like a train leaving the station, rapidly disappearing into the distance. With house prices rising twice as fast as incomes in England, homeownership has become a distant and unrealistic goal for many, especially those on lower incomes. Even in regions where affordability is better, like Northern Ireland, only the highest-income households can compete. This is not a sudden crisis but the result of decades of failure by successive governments to address the root causes. The solution lies in tackling the jigsaw puzzle of challenges: increasing housing supply, fostering innovation, unlocking capital and addressing affordability. At the heart of this is a planning system bogged down by bureaucracy, local opposition and polarised priorities. Without bold reforms to planning and coordinated action, the train of homeownership will remain out of reach for all but the wealthiest.
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Patricia McGirr
Founder at Repossession Rescue Network
England’s housing market is a masterclass in inequality. Prices soar while incomes stagnate, trapping millions in a hamster wheel of hopelessness. This crisis is tearing the heart out of communities; key workers are priced out, families crushed by debt and the dream of homeownership reduced to a distant dream. London is a housing dystopia where even the wealthiest deciles can barely keep up. Tinkering around the edges with failed policies won’t fix this; we must build homes people can afford, or we’ll condemn entire generations to a sense of permanent property penury.
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Darryl Dhoffer
Founder at The Mortgage Geezer
It's frankly mind-boggling that the average person living in England needs nearly nine years of their entire income to buy a modest home. And let's not forget our friends in Wales, Scotland and Northern Ireland. They're doing slightly better, only needing five to six years of their income. What a bargain. People are being priced out of the market and then some. For low-income households, homeownership is a pipe dream. Why bother saving when you'll never be able to afford a decent place to live? As for London, let's just say if you're not in the top 10% of earners, you might as well give up now. Even Elon Musk would think twice about buying in the capital as launching rockets into space is cheaper. The average person is never going to own a home there. They might as well rent a cupboard under the stairs. The housing market is a shining example of how well our economy is functioning, or not.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
This report outlines what has been painfully obvious for years: that it is becoming increasingly difficult for households, especially the younger generation, to get onto the housing ladder. Wages and disposable income simply cannot keep up with soaring house prices. For many aspiring homeowners, this data reveals the financial Everest they need to climb.
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Justin Moy
Managing Director at EHF Mortgages
It appears we may have seen the last of the single first-time buyer. Affordability for this demographic is a near extinction event. Joint incomes are almost a necessity across the UK to buy any reasonable first home. With property inflation running at twice the rate of income inflation, this situation is not going away quickly, and no amount of affordable housing projects will remedy this in the short term.
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David Stirling
Independent Financial Adviser at Mint Wealth
This makes for shocking reading for those looking to get on the housing ladder. You now require between five and nine-times average income to buy an average home. Even in Northern Ireland where the figures look attractive on the face of it, the average property prices are much lower at around £160k so the income ratio will always make it more easily acheived, if you can even find a property. With mortgage interest rates remaining high and the cost of living still keeping disposable incomes low, the dreams of homeownership are dwindling for most people in this lifetime.
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Ken James
Director at Contractor Mortgage Services
Unaffordable and out of reach is the description many would use for the current state of the UK housing market. The rise in house values across the country has outpriced many leaving them disillusioned and resigned to renting. What is surprising, however, is the resilience of the housing market with purchases from first-time buyers still in full swing, especially as they strive to take advantage of the lower stamp duty whilst it lasts. The Bank of Mum and Dad and Grandparents will be assisting many, and there are those who have reaped the benefits of increased values on their homes making up a percentage of the house purchases. As a broker, we hope this continues but the hardships for many trying to access the housing ladder are palpable and look like they won't change anytime soon.
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Simon Bridgland
Broker at Charwin Private Clients
Even in the hardest of capitalist hearts beats a little socialism. When people read figures like these it’s no surprise that most people’s reaction is about how outrageous it is, and how the future generations have zero chance of having a home to call their own. Yet many of these naysayers are the very ones who have a rental on the side, as a pension or other support. It’s this which helps drive a crazy property market: rental yields.
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Dariusz Karpowicz
Director at Albion Financial Advice
The eye-watering house price to income ratios revealed by the ONS paint a stark picture - even London's highest earners would need to fork out a whopping eight years of income for an average home in the capital. The notion of stretching mortgages to Scandinavian lengths of 100+ years might seem far-fetched, but with property prices outpacing wages at breakneck speed (doubling the rate in England), we're rapidly approaching a crossroads. Traditional 25-year mortgages are becoming as rare as affordable homes in Zone 1, forcing a fundamental shift in how Brits view property ownership. While the rental market might absorb some of this pressure, it begs the question: are we witnessing the end of Britain's long-standing love affair with home ownership, or will creative financing solutions emerge to bridge this ever-widening affordability chasm?
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Kylie-Ann Martin
Director at KAG Financial
Unfortunately affordability continues to be one of the biggest issues we see when speaking to want-to-be buyers. While house prices were predicted to drop over the past few years, we have instead seen the opposite. With a national housing shortage, prices continue to rise - leaving some buyers behind. We are now seeing more clients looking to relocate to achieve a more affordable purchase price, whilst some others who are tied to an area for work are now caught in a rental trap. We need lenders to review affordability and bring it into the modern world with current house prices taken into account.
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Jonathan Burridge
Founding Adviser at We Are Money
Despite this data, house prices continue to rise, lenders continue to lend and, more importantly, borrowers continue to borrow. We need a social reset, and urgently. Homes have been something used to create wealth rather than security of tenure and until we stop subsidising our living expenses with borrowing this cycle will continue until it fails hard and fast.