Property affordability continued to improve in 2025 but average home in England still costs 7.6 times average earnings

PROPERTY affordability continued to improve in 2025 but the average home in England still costs 7.6 times average earnings and “that is not a housing ladder most ordinary working people can climb comfortably”.

In 2025, the median average home in England, at £300,000, cost 7.6 times the median annual average earnings of a full-time employee (£39,300); in Wales, the average home (£213,000) was 6 times the median annual average earnings (£35,800), new data shows.

Affordability in England and Wales has continued to improve in 2025, after ratios peaked in 2021. Since 2021 median house sales prices have increased by 5%, while average earnings have increased by 25%.

Housing affordability improved in two-thirds of local authorities (LAs) in England and Wales (213 areas) and worsened in 103 (32%) since 2024.

The most affordable LAs in 2025 were Hyndburn and Kingston upon Hull (both with an affordability ratio of 4.1), the least affordable was Kensington and Chelsea (25.2, which was about six times less affordable).

In the North East, an average-priced home was affordable with 5.0 times average earnings, compared with London (affordability ratio of 10.5) where a further £279,000 would be required to buy an average-priced home in addition to five times average earnings.

Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, said securing a mortgage is getting harder as rates continue to go up.

He added: "The 2025 housing landscape reveals a steady improvement in affordability across England and Wales. While the English median house price sits at £300,000 (7.6x earnings) and Wales at £213,000 (6x), the gap has narrowed since the 2021 peak. 

"This shift is driven by a 25% surge in earnings outstripping a modest 5% rise in sales prices. However, statistics alone don't tell the full story. As interest rates climb, lenders may scale back affordability assessments, tightening borrowing power despite lower price-to-earnings ratios. 

"This creates a paradox: homes look cheaper on paper, but securing a mortgage remains a hurdle. Regional divides persist, from the North East's accessible 5.0 ratio to London's staggering 10.5, where buyers need an extra £279,000 beyond five times their salary."

Nouran Moustafa, Practice Principal & IFA at Roxton Wealth, said average Brits will still struggle to get on the ladder.

She added: "My reaction is that any improvement is welcome, but we need to be honest about the scale of the problem. When the average home in England still costs 7.6 times average earnings, that is not a housing ladder most ordinary working people can climb comfortably, it is still a stretch. 

"Yes, wage growth outpacing house price growth helps, and that matters, but for many people the real barriers are still the deposit, the cost of borrowing, rent eating into savings, and the fact that affordability looks very different depending on where you live. 

"So while the figures are moving in a better direction, I do not think the average Brit will feel like homeownership has suddenly become easy. What needs to happen is more than just celebrating marginal improvement. We need more supply, better support for first-time buyers, and a housing system that works for working people, not just people who already have family help or existing wealth."

Steven Greenall, Mortgage and Protection Advisor at Dunmow-based Protect & Lend, said we are in the midst of a “silent property crash”.

He added: "These figures show the silent property crash is still in existence. Wages rising faster than house price inflation is assisting with affordability and allowing more and more people to realise their dreams and get onto the property ladder.

“There is still the old dynamic though, of less supply than demand stretching those first-time buyers.”

Rohit Parmar-Mistry, Founder at Burton-on-Trent-based Pattrn Data, said housing is not affordable in the UK.

He added: “Affordability improving is welcome, but it is not the same thing as housing becoming affordable. A ratio dropping from eye watering to merely painful still means a lot of people are one rent rise or one interest rate shock away from falling off the ladder. The awkward truth is we have built a system where supply cannot respond quickly, and demand is turbocharged by credit. 

"If wages move faster than prices for a year or two, the market treats it like a breather, not a reset. London is the clearest signal: even when the headline ratio improves, the cash gap to buy is still enormous. If we actually want the ladder to exist, we need more homes in the places people can work, faster planning, and fewer incentives that reward land hoarding. 

"And on the buyer side: stop pretending the answer is ever larger loans. That just bakes today’s prices into tomorrow’s debt. The policy test is simple: will it lower the total cost of living, not just move the numbers on a chart?”