- New build property across England and Wales is 9.5 times the average salary in 2020, down for the third year in a row
- The North West remains the most affordable region, London the least
- The Wirral, Liverpool and Newcastle-under-Lyme most affordable locations; Kensington and Chelsea the least
New build housing affordability across England and Wales improved for the third year in a row during 2020, Paragon analysis of official figures has shown.
At £300,000, the average new build property during the year was 9.55 times the average salary of £31,500. This is down from 9.55 in 2019 and a high of 9.67 times salary recorded in 20171.
Across England and Wales, new build housing affordability improved in 51% - or 167 of a total of 330 - local authority areas.
Ratio of house prices of newly built dwellings to average salary
| |
2019 |
2020 |
+/- |
| England and Wales |
9.55 |
9.50 |
-0.05 |
| England |
9.61 |
9.60 |
-0.01 |
| North East |
7.71 |
7.92 |
+0.02 |
| North West |
7.47 |
7.74 |
+0.27 |
| Yorkshire and The Humber |
7.88 |
8.33 |
+0.45 |
| East Midlands |
9.10 |
8.83 |
-0.27 |
| West Midlands |
9.02 |
9.16 |
+0.14 |
| East |
10.09 |
10.17 |
+0.08 |
| London |
14.38 |
14.51 |
+013 |
| South East |
11.08 |
11.10 |
+0.02 |
| South West |
10.07 |
9.99 |
-0.08 |
| Wales |
8.11 |
8.13 |
+0.02 |
Analysis of the average earnings of the population resident in these regions showed the North West remained the most affordable region to buy a new build property at 7.74 times salary, followed by the North East (7.92). At the other end of the scale, London was the least affordable region at 14.51 times salary, followed by the South East (11.10) and the East (10.17).
Ratio of house prices of newly built dwellings to average salary 2020
| |
Average salary |
Average new dwelling price |
Affordability |
| England and Wales |
31,580 |
300,000 |
9.50 |
| England |
31,766 |
304,995 |
9.60 |
| North East |
27,971 |
221,475 |
7.92 |
| North West |
29,700 |
229,950 |
7.74 |
| Yorkshire and The Humber |
28,800 |
240,000 |
8.33 |
| East Midlands |
29,430 |
260,000 |
8.83 |
| West Midlands |
29,481 |
270,000 |
8.83 |
| East |
32,944 |
334,994 |
10.17 |
| London |
38,592 |
560,000 |
14.51 |
| South East |
34,219 |
380,000 |
11.10 |
| South West |
30,039 |
299,995 |
9.99 |
| Wales |
28,273 |
230,000 |
8.13 |
Robert Orr, Paragon Development Finance Managing Director, said: “Housing affordability remains an issue across the UK and, whilst it’s positive to see affordability for new build homes improve across England and Wales, the sector needs to look at innovative ways to help people purchase new build homes.
“The Stamp Duty holiday, Help to Buy and the Government’s 95% mortgage guarantee scheme are certainly a step in the right direction, but the supply side issue needs to be addressed to get more new homes built, particularly by SME developers. At Paragon, we are committed to supporting the sector and we have recently launched 70% Gross Development Value lending to support SME developers, as well as a sub £1 million loan for smaller housebuilders.”
He added: “Government statistics show there were nearly 150,000 homes completed in England in 20202. Whilst the year was obviously impacted by coronavirus and below historical average, there is a significant shortfall of new homes needed.”
The Wirral, Liverpool and Newcastle-under-Lyme were the most affordable locations to buy a new home in 2020, followed by Walsall and Copeland.
All of the least affordable local authorities were located in London or the East of England. Kensington and Chelsea, Westminster and Hammersmith & Fulham were the most expensive areas to buy a new home during the year.
Top 10 most affordable local authorities for new build dwellings
| |
Average salary £ |
Average new dwelling price £ |
Affordability ratio |
| Wirral |
28,977 |
60,950 |
2.10 |
| Liverpool |
30,860 |
79,995 |
2.59 |
| Newcastle-under-Lyme |
29,849 |
112,500 |
3.77 |
| Walsall |
27,896 |
106,245 |
3.81 |
| Copeland |
43,463 |
207,950 |
4.78 |
| Carmarthenshire |
29,054 |
260,000 |
8.83 |
| Stevenage |
32,627 |
195,000 |
5.98 |
| Doncaster |
29,178 |
174,995 |
6.00 |
| Fylde |
36,089 |
222,500 |
6.17 |
| Burnley |
25,987 |
161,995 |
6.23 |
Top 10 least affordable local authorities for new build dwellings
| |
Average salary £ |
Average new dwelling price £ |
Affordability ratio |
| Kensington and Chelsea |
46,568 |
1,807,500 |
38.81 |
| Westminster |
43,726 |
1,456,000 |
33.30 |
| Hammersmith and Fulham |
41,262 |
1,120,000 |
27.14 |
| Camden |
42,528 |
1,045,000 |
24.57 |
| Richmond upon Thames |
50,006 |
1,150,000 |
23.00 |
| Hackney |
37,585 |
860,250 |
22.89 |
| Lambeth |
42,000 |
900,000 |
21.43 |
| Islington |
47,120 |
809,600 |
17.18 |
| Castle Point |
33,671 |
575,000 |
17.08 |
| Epping Forest |
36,549 |
599,995 |
16.42 |