Higher mortgage rates have hit the housing market in 2023, making affordability the key consideration for anyone buying a home.
But how do you know where houses are affordable?
It’s all about the relationship between house prices and salaries in your chosen location.
We turn these into a ratio, which shows us how many times you need to multiply your annual salary to buy the average local house outright.
It highlights that the places with the cheapest house prices aren’t always the most affordable if local wages are also low.
Our latest analysis shows that couples have to spend 3.8 times their combined annual salary to buy the average UK home, worth £276,000.
How that stacks up:
Average UK couple’s joint salary: £72,632
Average UK house price: £276,000
Affordability ratio: 3.8 (house price divided by joint salary)
We’ve looked at nearly 1,000 of the largest postal towns in Britain to see which ones have the best affordability ratio. In other words, to find the most affordable towns to buy a home in 2023.
Here's what we discovered.
The 10 most affordable places to buy a home in Britain
| Postal town and region | Median value of a home | Average annual income of a couple | House price to earnings ratio |
|---|---|---|---|
| Cumnock, Scotland | £79,030 | £75,665 | 1.04 |
| Shildon, North East | £69,650 | £65,438 | 1.06 |
| Greenock, Scotland | £93,790 | £76,700 | 1.22 |
| Saltcoats, Scotland | £93,190 | £74,949 | 1.24 |
| Ardrossan, Scotland | £94,170 | £74,949 | 1.26 |
| Girvan, Scotland | £102,130 | £80,426 | 1.27 |
| Irvine, Scotland | £95,965 | £74,949 | 1.28 |
| Port Glasgow, Scotland | £98,710 | £76,700 | 1.29 |
| Peterlee, North East | £85,300 | £65,438 | 1.30 |
| Wishaw, Scotland | £98,695 | £75,334 | 1.31 |
Scotland dominates the list of the most affordable towns to buy in Britain, with 8 of the top 10 towns in Renfrewshire, Ayrshire and North Lanarkshire.
Cumnock in Ayrshire takes the number one spot for the most affordable town to buy in Britain. A couple buying a house there will usually spend 1.04 times what they earn in a year, making Cumnock almost 4 times more affordable than the UK average.
Second place is claimed by the English town of Shildon in County Durham with an affordability ratio of 1.06, although it previously held the top spot between 2019 and 2022.
The third most affordable town in Britain is Greenock in Renfrewshire, where a house costs 1.22 times the average couple’s salary.
The only other place on the list outside Scotland is Peterlee in County Durham with an affordability ratio of 1.30.
The 10 most affordable places to buy a house in England
| Postal town and region | Median value of a home | Average annual income for a couple | House price to earnings ratio |
|---|---|---|---|
| Shildon, North East | £69,650 | £65,438 | 1.06 |
| Peterlee, North East | £85,300 | £65,438 | 1.30 |
| Ashington, North East | £93,800 | £69,612 | 1.35 |
| Stanley, North East | £89,230 | £65,438 | 1.36 |
| Ferryhill, North East | £92,885 | £65,438 | 1.42 |
| Crook, North East | £96,665 | £65,438 | 1.48 |
| Birkenhead, North West | £112,495 | £72,644 | 1.55 |
| Hartlepool, North East | £106,340 | £66,175 | 1.61 |
| Blyth, North East | £116,195 | £69,612 | 1.67 |
| Workington, North West | £121,000 | £72,398 | 1.67 |
The most affordable town in England is Shildon, County Durham, where the average home costs 1.06 times a couple’s annual salary.
In fact, 8 out of 10 of the most affordable places to buy a home in England are in the North East, with 6 in County Durham.
These include Peterlee, where a home costs 1.30 times a couple’s annual earnings, as well as Stanley (1.36), Ferryhill (1.42), Crook (1.48) and Hartlepool (1.61).
Northumberland’s Ashington is the third most affordable place in England while Blyth - 8 miles south - also makes the list. These former coal mining towns have affordability ratios of 1.35 and 1.67 respectively.
We also have two entries from the North West - Birkenhead in Merseyside and Workington in Cumbria, where the average house costs less than 1.7 times a couple’s annual salary.
The 10 most affordable places to buy a home in Wales
| Postal town | Median value of a home | Average annual income of a couple | House price to earnings ratio |
|---|---|---|---|
| Ferndale | £96,960 | £65,513 | 1.48 |
| Abertillery | £114,630 | £64,744 | 1.77 |
| Mountain Ash | £118,920 | £65,513 | 1.82 |
| Tonypandy | £123,090 | £65,513 | 1.88 |
| Treorchy | £125,395 | £65,513 | 1.91 |
| Pentre | £126,935 | £65,513 | 1.94 |
| Maesteg | £133,610 | £67,061 | 1.99 |
| Tredegar | £130,940 | £64,744 | 2.02 |
| Merthyr Tydfil | £134,480 | £65,918 | 2.04 |
| Aberdare | £135,345 | £65,513 | 2.07 |
Ferndale in Rhondda Valley remains the most affordable town to buy a home in Wales, and the only place where the average house costs less than £100,000. A couple on average local salaries can buy a typical home for 1.48 times their combined annual income.
Abertillery in Ebbw Fach Valley is the second most affordable town in Wales, with the average house costing 1.77 times a couple’s annual salary. The town is about 10 miles from Pontyperry in the county of Monmouthshire.
Mountain Ash in the Cynon Valley takes the third spot on our list. A couple can expect to spend 1.82 times their annual earnings on the typical home.
Most of the affordable places in Wales are former industrial and coal mining towns in the Welsh Valleys, particularly in the Rhondda Cynon Taf and Blaenau Gwent.
The 10 most affordable places to buy a home in Scotland
| Postal town | Median value of a home | Average annual income of a couple | House price to earnings ratio |
|---|---|---|---|
| Cumnock | £79,030 | £75,665 | 1.04 |
| Greenock | £93,790 | £76,700 | 1.22 |
| Saltcoats | £93,190 | £74,949 | 1.24 |
| Ardrossan | £94,170 | £74,949 | 1.26 |
| Girvan | £102,130 | £80,426 | 1.27 |
| Irvine | £95,965 | £74,949 | 1.28 |
| Port Glasgow | £98,710 | £76,700 | 1.29 |
| Wishaw | £98,695 | £75,334 | 1.31 |
| Kilwinning | £99,010 | £74,949 | 1.32 |
| Clydebank | £98,470 | £72,804 | 1.35 |
Many of Scotland’s most affordable places to buy a home are also the most affordable in Britain, with couples spending as little as 1.04 times their combined salary on a house.
Cumnock takes the affordability crown for the whole of Britain, while fellow South East Scottish towns of Greenock and Saltcoats are also great for affordability. Couples buying a home in these areas can expect to pay between 1.04 and 1.24 times their annual salary.
These towns enjoy above-average income levels while average house prices remain below £100,000.
The 10 most affordable places to buy a home in London
Even the most affordable places to buy a house in London are more expensive than the UK average. If two average earners saved their entire income for five years, they'd still be short of buying a home in their area.
Croydon is the most affordable place to buy a home in London. Couples can expect to pay 5.02 times their combined salary to buy a house outright.
Greenwich (5.14), Tower Hamlets (5.26) and Barking and Dagenham (5.28) also offer good affordability for London, although their ratios are much higher than the 3.8 UK average.
The most affordable places to buy a house in London are mainly outer London boroughs to the east and south of the city.
They’re all places where house prices are below the London average of £541,000 in October 2023. They also tend to have a large stock of two bedroom flats, which brings the median property value down and improves the affordability ratio.
| Postal town | Median value of a home | Average annual income of a couple | House price to earnings ratio |
|---|---|---|---|
| Croydon | £415,245 | £82,700 | 5.02 |
| Greenwich | £441,410 | £86,000 | 5.14 |
| Tower Hamlets | £478,580 | £91,000 | 5.26 |
| Barking and Dagenham | £380,200 | £72,000 | 5.28 |
| Bexley | £451,580 | £84,300 | 5.36 |
| Havering | £453,870 | £83,500 | 5.44 |
| Lewisham | £444,755 | £81,100 | 5.48 |
| Enfield | £454,450 | £81,000 | 5.61 |
| Bromley | £535,790 | £93,900 | 5.71 |
| Newham | £449,780 | £78,100 | 5.76 |
Top 10 areas where housing affordability has improved the most in 2023
| Postal town and region | House price to earnings ratio 2023 | House price to earnings ratio 2022 |
|---|---|---|
| Teignmouth, South West | 5.25 | 6.27 |
| Newton Abbot, South West | 4.99 | 5.90 |
| Fleetwood, North West | 1.82 | 2.14 |
| Radlett, East of England | 11.36 | 13.30 |
| Hockley, East of England | 5.04 | 5.87 |
| Gravesend, South East | 4.37 | 5.10 |
| Rochester, South East | 4.48 | 5.21 |
| Gillingham, South East | 4.16 | 4.83 |
| Brentwood, South East | 5.05 | 5.87 |
| Cranbrook, South East | 6.14 | 7.13 |
For affordability to improve, earnings need to rise more than house prices over the course of a year.
That’s exactly what’s happening at the moment, as UK earnings are growing 7.7% while house prices are falling by up to 5%.
This is an early sign of a bigger affordability reset we expect in the coming years. It’s welcome news for those wanting to get on the property ladder, following a decade of house price growth outpacing earnings.
Affordability has improved the most in Teignmouth and Newton Abbot, both in South East Devon. While this area of Devon has enjoyed stronger earnings growth than neighbouring districts, home values have fallen by £19,000 in the last year on average.
Some commuter towns in Hertfordshire, Kent and Essex also offer improved affordability, which might be an option for London renters who want to buy a home.
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