Tower Hamlets is London’s most affordable borough for home buyers, according to new research from property website Zoopla — although average prices there are still almost five times typical household earnings.
Zoopla puts the average home value in Tower Hamlets at £455,200, equivalent to 4.91 times the combined income of two full-time earners. No other London borough comes in lower.
The finding is part of a wider study of 929 towns across Britain, which found a typical home is valued at £299,100, or 4.3 times typical household earnings. The research identified 36 towns where homes typically cost less than twice the annual earnings of two full-time workers.
Richard Donnell, executive director at Zoopla, said house prices have been rising more slowly than incomes, helping to improve affordability, but higher mortgage rates continue to offset some of those gains by increasing the monthly cost of buying a home.
“Affordability varies widely across the country, with many towns in northern England and Scotland offering much better value relative to local household earnings,” he said. “However, lower house prices don’t always mean it’s easier to buy, as access to employment, deposits and mortgage costs remain important considerations.”
He added that buyers have more homes to choose from than a year ago, and there is greater scope to negotiate on price, particularly in southern England. “Anyone considering a move should take a fresh look at what they can afford and what’s available locally,” he said. “Expanding a search to neighbouring towns could make a meaningful difference to their buying options.”
Scotland accounted for 23 of the 36 most affordable towns in Britain, with the North East and North West of England making up much of the remainder. Shildon in County Durham was named Britain’s most affordable town, with average property prices at just £73,600 — 1.15 times the combined salary of two full-time earners. Ferryhill, also in County Durham, followed at £91,500 (1.43 times earnings), and Peterlee at £96,500 (1.51 times).
The most affordable town in each region was: Shildon in the North East (£73,600, 1.15 times earnings); Fraserburgh in Scotland (£116,000, 1.59); Workington in the North West (£114,900, 1.65); Ferndale in Wales (£116,200, 1.82); Kingston upon Hull in Yorkshire and the Humber (£131,400, 2.16); Stoke-on-Trent in the West Midlands (£160,700, 2.64); Ilkeston in the East Midlands (£192,100, 2.70); Great Yarmouth in the East of England (£166,300, 2.72); Dover in the South East (£206,300, 2.97); Bideford in the South West (£224,700, 3.35); and Tower Hamlets in London (£455,200, 4.91).
The research only included postal towns with 5,000 or more homes. Zoopla cautioned that lower property prices must be weighed against factors such as employment opportunities, deposit requirements and mortgage costs.
London’s wider housing market has been cooling. London house prices fell 3.1 per cent in the year to October, according to Lloyds figures, while at the other end of the scale Kensington and Chelsea remains the least affordable place to live in the country.
