Majority of urban areas now beyond reach for middle class households, analysis finds
The gap between income and housing costs is widening across the UK, with lower middle-class households increasingly unable to purchase homes in most major cities, according to a new report.
Households defined as middle class—those earning between two-thirds and twice the local median income, which stands at £766.60 per week according to the Office for National Statistics—are finding property prices in cities such as London and Oxford far out of reach. Even in smaller towns, rising mortgage rates and a shortage of available homes have left many with limited options and little financial security.
Recent research from Morta, a mortgage technology provider, assessed the purchasing power of lower and upper middle-income households using a model based on a 36% gross debt-to-income cap, a 25-year mortgage term, a 4.52% fixed interest rate, and a 20% deposit. The findings reveal significant differences in what each group can afford, with the lower middle class increasingly excluded from homeownership in many locations.
Upper middle-income earners in cities such as London, Reading, and Cambridge can access properties valued above £600,000. London also leads the country in median weekly pay. In contrast, affordability limits are much lower in places like Bolton, Durham, and Southend-on-Sea, which also have some of the lowest average wages in the UK.
The data points to a growing divide in homebuying power between income groups, with geography playing a key role in determining access to the property market.
Lower middle-class households are now unable to afford homes in 42 out of 47 major UK cities, according to Morta’s analysis. London remains the least affordable, with the average property price exceeding the maximum affordable amount for a lower-middle-class household by £341,917—the largest gap nationwide.
Oxford ranks second, with homes costing £308,871 more than what lower middle-income buyers can afford. In 39 of the 47 cities surveyed, the lower middle class can only purchase homes priced below £200,000.
Data from 2021 showed that less than a third of areas in England and Wales had average house prices within reach of the middle and lower-middle class at that time. Since then, the affordability gap has continued to widen.
For upper middle-income buyers, the situation is less severe but still challenging. While they can purchase a home in all 47 cities analysed, they are able to afford a second property in only 30. Even among high earners, purchasing in 18 areas—including 12 in London—remains out of reach based on current average prices.
For example, in Kensington and Chelsea, the average home costs £1.26 million, while the maximum affordable price for a high-earning middle-class household is £597,637, leaving a shortfall of £665,469. House prices in this area have dropped to their lowest since 2013. However, the gap remains substantial.
Other London boroughs such as Richmond upon Thames and Westminster also present significant affordability gaps, while outer boroughs including Barnet, Harrow, and Ealing show shortfalls ranging from £20,000 to £80,000.
The analysis suggests that even upper middle-income households face barriers to homeownership in many parts of the country. Income growth has not kept pace with rising property prices, and for many families, owning a home remains out of reach as the gap between lower and upper earners continues to expand.
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