Earnings growth has outpaced house price rises, but affordability remains a pressing issue
Homeownership became slightly more attainable across England and Wales in 2025, as pay growth continued to exceed house price inflation.
According to figures published by the Office for National Statistics, the median home in England now costs 7.6 times the median annual earnings of a full-time worker, with the typical property priced at £300,000 against median pay of £39,300.
In Wales, the average home price of £213,000 equated to 6.0 times median earnings of £35,800.
Affordability has improved since the market peaked in 2021. Since then, median sale prices have risen by 5%, while average earnings have increased by 25%.
At a local authority level, affordability improved in 213 areas across England and Wales and deteriorated in 103 authorities compared with 2024.
Hyndburn and Kingston upon Hull were the most affordable areas in 2025, each with a ratio of 4.1. Kensington and Chelsea was the least affordable at 25.2, around six times less affordable than the two lowest-ranked areas.
Regional differences remained marked. In the North East, the typical home price was equivalent to five times average earnings. In London, the ratio stood at 10.5. Based on those figures, buyers would need an additional £279,000 on top of five times average earnings to purchase an average-priced home.
“The latest data from the Office for National Statistics shows signs of improving housing affordability in many areas across England and Wales as earnings begin to outpace house price growth,” said Mary-Lou Press (pictured right), president of industry body NAEA Propertymark.
“However, from a property professional’s perspective, this reflects a market that is stabilising rather than fully recovering. Affordability remains stretched by historic standards, particularly for first-time buyers, and significant regional disparities continue to shape access to home ownership.
“Wider global economic uncertainty and geopolitical unrest also have the potential to influence inflation, interest rates and supply chains, which could impact future housing affordability and market stability.
“Ultimately, without a sustained increase in housing supply and continued support for buyers, affordability challenges will remain a key issue across both the sales and rental markets.”
For Ryan Etchells (pictured right), chief commercial officer at specialist lender Together, boosting housing supply requires an economic climate that gives builders confidence to start projects and earn sustainable returns.
“The sheer cost of the raw materials and labour required for construction, combined with a huge amount of red tape, means that new projects are being put on the back burner,” he said.
Etchells pointed out that despite planning reforms and public investment, housebuilding is declining, with private sector output across Britain down 6.3% in the three months to January 2026. “More efforts by the government need to be made to address supply chain issues as well as labour shortages to get the private sector building again,” he said.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
