In charts: How homes have got less – and more – affordable since the financial crisis

In 54pc of local authorities, the average home is more affordable than it was in 2007 due to rising wages and house prices not recovering from the financial crisis CREDIT:  BLOOMBERG

Ten years ago, the financial crisis upended the housing market. Prices went into freefall, and many areas of the country have still not recovered – while others have seen prices soar.

In the intervening years the gap between the least and most affordable areas of Britain has almost doubled, according to new research by the Yorkshire Building Society.

Perhaps more surprisingly, homes in 54pc of local authorities in Britain are now more affordable than they were in 2007. This is despite the fact that the average house price in Britain has risen 21pc in the same period.

Yorkshire Building Society worked out the changing levels of affordability by calculating the house price to earnings ratios across each local authority. This equates to how many times the average local annual salary a house in the area costs.

In England, this ratio has worsened by 3.3pc, meaning most homes are more unaffordable. It is the opposite story in Scotland and Wales, where it has improved by 18.9pc and 17.2pc respectively.

Andrew McPhillips, Yorkshire Building Society's chief economist, said: “Across London and large swathes of southern England, which were already some of the most unaffordable parts of the country, it has become increasingly difficult for first-time buyers and those wanting to move up the housing ladder to be able to buy their first or next home."

Areas where the ratio has become the most stretched during that period are all in London or the South East, where house prices have escalated out of reach of any wage inflation.

In many areas, property is cheaper to buy now than in 2007 for the people who live there, when looking at a house price to earnings ratio. This is largely due to house prices not yet rebounding to the level they were at the peak, but also because of wages increasing at a higher rate.

This is the case in 54pc of local authority areas, including Edinburgh, Birmingham, Peterborough, Leeds and Harrogate.

Mr McPhillips added: “While some northern cities, such as Manchester, are less affordable than they were in 2007, in much of the north of England, Scotland and Wales, the gap between earnings and house prices is around a third of the average for London.”

http://www.telegraph.co.uk/property/house-prices/charts-homes-have-got-less-and-affordable-since-financial/