70% of local authorities see improvement in affordability

Inverclyde has been crowned Britain’s most affordable place for first-time buyers, with new Nationwide data revealing the most and least affordable areas in Britain.

The report shows that affordability had improved across all regions in Great Britain over the past year. Around 70% of local authorities have seen an improvement in affordability, with Islington seeing the biggest improvement.

Least affordable local authorities

Kensington and Chelsea stands as the least affordable local authority in London, and across Great Britain overall, with a house price to earnings ratio (HPER) of 13.9.

In the Outer South East, Oxford ranks as the least affordable area, where first-time buyers face house prices around eight times average earnings. Its academic counterpart, Cambridge, holds the same position in East Anglia, with average property values close to £400,000 - significantly above others in the region.

Spelthorne in Surrey is the least affordable area within the Outer Metropolitan region. Its proximity to London makes it a prime commuter location, encompassing towns such as Staines-upon-Thames, Sunbury-on-Thames, and Shepperton.

In the South West, South Hams in Devon - home to popular destinations like Totnes, Dartmouth, and Salcombe - remains a highly desirable but costly area, with prices approaching seven times average earnings.

Similarly, in the East Midlands, Derbyshire Dales ranks among the priciest areas. Much of the district lies within the Peak District National Park and includes towns such as Matlock, Ashbourne, and Bakewell. Continuing this pattern, Westmorland & Furness, covering large parts of the Lake District National Park, is the least affordable location in the North.

Stratford-on-Avon in Warwickshire is another sought-after area, recording the highest prices in the West Midlands, with first-time buyer homes averaging around £300,000. In Yorkshire and the Humber, York remains the least affordable, with a first-time buyer HPER of 5.4.

Cardiff continues to top the list as the least affordable area in Wales, with a HPER of 5.3. In Scotland, Midlothian has overtaken neighbouring Edinburgh as the least affordable location, with a HPER of 4.9.

Most affordable local authorities

Inverclyde in Scotland is the most affordable local authority in Great Britain, where average first-time buyer homes cost just 2.3 times local earnings. The area, which includes Greenock and Port Glasgow, is also Scotland’s cheapest, with average prices of around £100,000.

Burnley and Hartlepool continue to be the most affordable locations in the North West and North respectively. In the West Midlands, Stoke-on-Trent retains its position as the most affordable area, with a HPER of 3.4.

Kingston upon Hull ranks as the most affordable local authority in Yorkshire and the Humber, with a HPER of 3.0. In the East Midlands, West Lindsey in Lincolnshire is the most affordable district.

Further along the east coast, Great Yarmouth in Norfolk remains the most affordable area in East Anglia and also has the lowest property prices in the region. On the south coast, Gosport in Hampshire stands out as the most affordable part of the Outer South East, with average prices of roughly £200,000 - well below neighbouring areas.

Swindon continues to be the most affordable town in the South West, with a HPER of 4.8. In the Outer Metropolitan region, Surrey Heath - covering Camberley and Bagshot - offers the best affordability, supported by relatively strong local earnings.

Bromley is the most affordable borough in London, although its HPER of 6.2 still exceeds that of most local authorities across the UK.

Where has affordability improved the most?

Around 70% of local authorities have experienced improved affordability over the past year. Many of the most notable gains have been seen across London boroughs, partly due to softening house prices. Despite this, affordability in the capital remains stretched compared to other regions.

Outside London, Norwich recorded the most significant improvement, with the first-time buyer HPER dropping to 4.3 from 5.4 in 2024, largely driven by rising earnings.

Welwyn Hatfield in Hertfordshire also saw a marked improvement, as its HPER declined from 7.6 in 2024 to 6.6, supported by both wage growth and easing property prices.

Where is raising a deposit most challenging?

A 10% deposit for a first-time buyer property is £15,000 or less in around 10% of local authorities, while in nearly half of areas deposits typically fall between £15,000 and £25,000.

Unsurprisingly, the ten local authorities requiring the largest deposits are all located in London. Of the 36 areas where a 10% deposit exceeds £40,000, 26 are in the capital. Kensington & Chelsea is the most challenging borough for buyers, reflecting average house prices above £1 million.

By contrast, around half of the areas where a 10% deposit is under £15,000 are in Scotland. Regions such as Inverclyde, East Ayrshire, and Aberdeen are among those where saving for a deposit is considerably more achievable.

Andrew Harvey, Nationwide’s senior economist, commented: “Our recent Affordability Report showed that affordability had improved across all regions in Great Britain over the past year, helping to support first-time buyer activity. However, it is important to recognise there is also considerable variation in affordability within regions and in this report we explore this further.

“We’ve updated our local affordability metrics, which use house price and earnings data from the Land Registry and ONS to give the most comprehensive view at a local level.

“London continues to have the greatest gap between the most and least affordable areas within the region by a considerable margin. Meanwhile, the North has the smallest difference between highest and lowest house price to earnings ratios by local authority area."