Despite modest improvements in house affordability as wages rise faster than prices, Britain’s biggest building society found that prospective buyers with average UK income, buying a typical first‑time buyer property with a 20 per cent deposit faced monthly mortgage payments equivalent to 36 per cent of their take-home pay – well above a long term average of 30 per cent.
Andrew Harvey, a senior economist at Nationwide, said that housing affordability “remains stretched by historic standards” with first-time buyers still facing the hurdle of high deposits.
“It is not surprising that a significant proportion of first-time buyers have to draw on help from friends and family to raise a deposit.
Nationwide, the UK’s biggest building society, said affordability pressures are strongest in southern England and East Anglia, while in northern England and Scotland mortgage payments as a share of take-home pay are closer to their long term average.
Mr Harvey added: “Despite these affordability challenges, mortgage market activity and house prices proved surprisingly resilient in 2024.
“The number of mortgage approvals returned to 2019 levels, despite typical mortgage rates being around three times higher. Perhaps even more remarkably, first-time buyers’ share of house purchase mortgages was actually higher in 2024 (54%) than it was pre-pandemic (51%).
Its research also examined how affordability differs by occupation and region.
It found that mortgage payments on a typical first-time buyer property would swallow up around a quarter (25.6%) of the take-home pay of managers, directors and senior officials. For those in professional occupations more widely, this increases to 30.9 per cent.
For people in admin and secretarial roles it would be 47.2 per cent, for sales and customer service staff, these mortgage payments would represent 51.9 per cent of take-home pay, which is the same for people working in caring and leisure services.
House price-to-earnings ratios remain broadly similar to a year ago across the UK, with London continuing to have the highest ratio at 8.0 and Scotland the lowest at 3.0.
At local levels, affordability varies widely. Kensington and Chelsea remains the least affordable area in Britain, with a house price to earnings ratio (HPER) of 13.6, while Aberdeen is the most affordable, with an HPER of just 2.5.
Burnley, Hartlepool, and North East Lincolnshire are among the most affordable areas, with HPERs below 3.0. Swindon emerged as the most affordable location in the South West, while Enfield, with an HPER of 6.2, was the most affordable London borough.
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