Mojo Mortgages analysed salary data from the Office for National Statistics and January 2022 property valuation data from Zoopla to establish the average income multiple required to buy a property in each location.
The mortgage broker added that with house prices rising at their fastest pace in 17 years, first-time buyers need to borrow up to seven-and-a-half times their salary to get on the property ladder in some of the most popular UK cities.
Homes in Bath topped the survey as the least affordable for first-time buyers, as they typically command a price tag of more than £528,530. Mojo Mortgage’s survey found the price of a home in Bath was twice the national average of £287,830 among the locations featured .
Residents were typically earning £29,940 a year, so a couple who’d saved a 15 per cent deposit would still have to borrow seven-and-a-half times their salary for an average-priced home in the city.
Wages are higher in Oxford where a couple would need to borrow 7.29 times their combined salary for a £570,357 property, while in London it would be an income multiple of 7.13 for a £704,138 home.
The top 20 most expensive towns and cities are all in or around the South of England, apart from Stratford-upon-Avon in 18th.
At the other end of the spectrum, it was Hull and 2.30, Bradford at 2.35 and Gateshead at 2.38 where property was most affordable when compared to the average salary.
Richard Hayes, chief executive and co-founder of Mojo Mortgages, said its research further evidence that first-time buyers are being squeezed out of the cities where they grew up or work.
“Lack of affordable housing has repercussions, not only for the individuals involved but the wider economy and community if workers in lower-paid jobs are priced out of the market.
“Enabling people to borrow more might help them onto the property ladder but much will depend on their circumstances as lenders and brokers must apply strict affordability checks. It’s also important that buyers weigh up whether the location offers the best quality of life for them.”
Hayes pointed out buyers could still enjoy the buzz of a big city without paying a premium in Manchester and Birmingham where wages are above average and housing is more affordable.
He said a couple buying a £235,650 home in Manchester would only need to borrow 3.77 times their salary, while in Birmingham it would be 3.56 times for a £235,681 property.
“Edinburgh and Glasgow are relatively affordable too, as are cities such as Liverpool, Newcastle and Leeds – but bargain hunters could also snap up a property in Hull borrowing just 2.30 times their salary, Bradford at 2.35 times or Gateshead at 2.38.”
