UK housing affordability remains stretched as London prices drive unaffordability, ONS data show

The latest data from the Office for National Statistics show that housing affordability in Britain remains stretched, with the ratio of average house price to average income remaining above five in many areas. By that metric, London remains the most unaffordable market, where the typical home price was about £562,000 in July 2025 and the affordability ratio in virtually every borough was well above 10.

Across the capital, the affordability gap is steep even for higher income bands. In London, all boroughs posted affordability ratios of at least 12, with Kensington and Chelsea the highest at 35.5 and Westminster at 24.4. Even households in the top income decile—the top 10%—face a ratio of 5.8, meaning a new purchase would still be considered unaffordable by the standard five-times-income threshold. A decile is used by the ONS to divide the population into ten equal groups to illustrate how affordability varies by income.

The regional picture is more nuanced. The North East remains the most affordable region, with an average price of about £164,000 in July 2025. In that region, the typical home could be affordable for the four highest income deciles, while across the South East, East, and South West affordability was concentrated among the top income decile. In contrast, the North East’s prices also translate into a much lower bar for homeowners on lower incomes: an average-priced home cost the equivalent of about 8.5 years of income for a low-income household (20th percentile) versus roughly 25 years in London.

Regionally, the July 2025 price data show wide variation: East Midlands £240,000; East of England £338,000; London £562,000; North East £164,000; North West £213,000; South East £382,000; South West £306,000; West Midlands £248,000; Yorkshire and Humber £206,000. Median affordability ratios also reveal divergence among the four UK countries: 7.9 in England, 5.4 in Wales, 5.3 in Scotland, and 4.6 in Northern Ireland for the financial year ending 2024.

The ONS notes that affordability remains a long-run challenge. The median price paid across the four countries rose to £292,000 in England, £209,000 in Wales, and £192,000 in Scotland by July 2025, with Northern Ireland at £185,000. In the year ending 2024, affordability in England remained the tightest among the four, though the gap has narrowed in Northern Ireland, where incomes have risen more quickly than prices in recent years.

Across England and Wales, 29 of 317 local authority areas—about 9%—were affordable to workers living there, the highest share since 2004. That contrasts with prior years when affordability was more favorable in larger swathes of the country. Housing-market participants note that affordability pressures are spreading to rents as well as purchases, even as the pace of annual growth slows.

Rent trends also point to the pressure, with the UK private rental market averaging £1,348 a month in August, up 5.7% year over year. England’s rent averaged £1,403, Wales £811, Scotland £1,002, and Northern Ireland £860. The overarching consumer-price backdrop remained subdued in August, with CPI at 3.8% year over year, contributing to cautious expectations for policy and lending in the near term.

Economists say that while price growth has cooled from the pace seen in previous years, affordability remains a fundamental hurdle for many households. The combination of high prices, modest wage growth in some sectors, and tighter mortgage controls keeps the market from returning to pre-crisis norms quickly, even as pockets of the country show evidence of improving balance between incomes and prices in certain years and regions.