Open Property Group: House Prices Need to Fall by 36 Per Cent to Make Them Affordable

LONDON, November 13, 2018 /PRNewswire/ --

Property prices in cities across England, Scotland and Wales need to fall by an average of 36 per cent to £125,329 to make owning a home affordable for a single person earning an average wage.

     (Photo: https://mma.prnewswire.com/media/782919/Open_Property_Group.jpg )

The only place in that is affordable for a single person with an average salary for that city and a mortgage of 3.5 times salary is Durham according to research from Open Property Group.

Using average salary and house price data for cities, it can reveal Cambridge is the most overpriced place in England where prices would need to fall by 68 per cent for someone with a 20 per cent deposit earning an average wage to afford to buy.

It was closely followed by Chichester, where a drop of 67 per cent would be needed and Oxford, which would require a drop of 65 per cent.

At the other end of the country house prices in Durham could rise by 12 per cent and still be affordable for someone on an average wage with a 20 per cent deposit and a mortgage of 3.5 times salary.

Open Property Group Managing Director, Jason Harris-Cohen said: "Home ownership peaked in the UK in 2007. These figures show just how far out of reach the right of passage enjoyed by the Baby Boomer generation is for Millennials.

"The figures make stark reading for anyone hoping to get onto the property ladder. Successive Governments have tinkered around the edges of the housing market with the 'Help to Buy' scheme and stamp duty exemptions for first time buyers.

"But it has done very little to improve the real position of those looking to buy their first home and the market has priced many out of ever owning a home in the town or city they grew up in.

"The Government needs to address the issue by providing better employment opportunities in the North, more incentives for first time buyers and by increasing the supply of affordable new homes in the South.  

"Naturally, if there is a better supply of available properties, prices could become more affordable as developers and home sellers compete to make their properties more saleable."

The Affordability Index  

   
         Least affordable with 20 per cent deposit and 3.5 x average salary
                                      mortgage
                                                        Percentage drop for
                        Affordable      Actual house    house price to be
    City                house price     price           affordable
    Cambridge           GBP139,742      GBP440,126      68%
    Chichester          GBP122,176      GBP368,328      67%
    Oxford              GBP139,291      GBP402,020      65%
    City of Westminster GBP342,961      GBP956,365      64%
    Brighton & Hove     GBP130,979      GBP363,639      64%
    Bath                GBP130,813      GBP335,481      61%
    Exeter              GBP103,469      GBP256,442      60%
    St Albans           GBP211,737      GBP502,956      58%
    City of London      GBP306,998      GBP709,020      57%
    Bristol             GBP118,484      GBP272,545      57%

   
         Most affordable with 20 per cent deposit and 3.5 x average salary
                                      mortgage
                                                        Percentage drop/increase
                        Affordable      Actual house    for house price to be
    City                house price     price           affordable
    Durham              GBP112,941      GBP100,674      12%
    Stoke-on-Trent      GBP101,325      GBP108,366      6%
    Stirling            GBP165,121      GBP180,889      9%
    Sunderland          GBP104,707      GBP114,755      10%
    Glasgow             GBP113,444      GBP132,454      14%
    Liverpool           GBP110,097      GBP128,960      15%
    Dundee              GBP105,241      GBP125,599      16%
    Preston             GBP106,663      GBP127,944      17%
    Lancaster           GBP119,849      GBP147,906      19%
    Hull                GBP91,004       GBP113,549      20%

Sources: ONS House Price Index June 2018 and ONS Labour market statistics for England, Scotland and Wales.

Assumptions - data for 49 cities was available and affordability is based on a single buyer with a lifestyle that would enable borrowing of 3.5 average salary by city. To calculate the affordability by city we have multiplied the average salary for that city by 3.5 times to get 80 per cent of the affordable price then added a deposit of 20 per cent to get the affordable house price.

For more information please visit www.openpropertygroup.com

About Open Property Group 

Open Property Group are a professional house buying company and buy all types of vacant or let property throughout England and Wales.

OPG specialise in buy to let property purchasing which suit landlords who want to cash in property quickly without disrupting the tenants.

Homeowners benefit from a quick sell house fast process , with a completion date fixed to the owners' requirements. By selling directly, you pay no agent fees, ‎and can plan ahead with certainty. We also pay your agreed legal costs too.