Winchester replaces Oxford as the least affordable city to live and work with the highest average property prices now 14 times annual earnings.
Winchester is now the least affordable city in the UK to live and work replacing Oxford with average property values of £630,432 compared to average earnings of £45,059, according to Halifax.
Property values are 14 times annual earnings as prices in Winchester increased 8% in the last year with higher demand from home movers trading-up to larger properties with more space.
Last year the least affordable city was Oxford where house prices increased a modest 2% over the year to £486,928 with average earnings of £39,220 or a price to earnings ratio of 12.4.
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London outside five least affordable
For the first time in six years, London is outside the top five least affordable cities in the UK with a price earnings ratio of 11.0 based on average prices of £564,695 and earnings of £51,257.
This table from Halifax shows the top ten least affordable cities in the UK in terms of Price to Earnings or PE ratio for August 2021.
| UK city | House price | PE ratio |
|---|---|---|
| Winchester | £630,432 | 14.0 |
| Oxford | £486,928 | 12.4 |
| Truro | £356,788 | 12.1 |
| Bath | £476,470 | 12.1 |
| Chichester | £446,899 | 11.9 |
| Cambridge | £482,300 | 11.9 |
| Brighton & Hove | £449,243 | 11.6 |
| Greater London | £564,695 | 11.0 |
| St Albans | £604,423 | 10.2 |
| Chelmsford | £424,690 | 10.2 |
For people living and working cities average property prices are £287,440 with PE ratio of 8.1 times and average earnings are £35,677 which is lower than the whole of the UK at £36,600.
Winchester is the least affordable city where house prices are higher by 8% over the year at £630,432 and the most expensive in the country, compared to the average earnings of £45,059.
For last year’s leader Oxford house prices are up 2% at £486,928 with a PE ratio of 12.4 ahead of Truro and Bath with price earrings ratio of 12.1 times.
PE ratios in cities are lower than the rest of the UK at 8.5 with house prices of £327,691 and average earnings of £38,600 reflecting higher demand from home movers looking for more space after the pandemic.
For remortgage buyers the higher house prices and competitive interest rates give them the opportunity to raise capital which can be used to create more space such as an extension or loft conversion.
Affordability hit by house price rise
Average house prices in UK cities have increased by 10.3% over the past year compared to the earnings for those living and working there increasing by only 2.1%.
The highest rise is Salisbury in the South West where house prices have increased 36% from £288,692 a year ago to £392,355 with a PE ratio of 10.0 times the average annual earnings is £39,154.
Hereford in the West Midlands had house prices rise 29% to £316,929, Lancaster in the North West up 19% to £217,392 and Birmingham higher by 19% and average prices of £249,692.
These higher property values offer equity release buyers the opportunity of lump sum cash upfront at lower interest rates to purchase a new car or reduce inheritance tax owed by your beneficiaries.
For first time buyers the most affordable city is Londonderry with a PE ratio of 4.7 times followed by Carlisle and Bradford at 4.8 times and Stirling with 5.4 times and all have house prices below the UK city average of £287,440.
What are your next steps?
Talk to our London City Mortgage brokers for advice if you remortgage your existing home and raising capital. Learn more by using the property value tracker chart and equity release calculator.
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To release equity from your property for home and garden improvements, we can recommend lifetime mortgages so begin your equity release quote for the latest provider offers.
