East Midlands sees largest improvement in new build affordability – Paragon

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  • 30/03/2021
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East Midlands sees largest improvement in new build affordability – Paragon
The price of an average new-build property in England and Wales was 9.5 times the average salary last year, showing affordability has continued to slowly improve over the last three years.

 

According to analysis from Paragon, the average price of a new-build was £300,000 compared to the average salary of £31,500. 

In 2019, new homes were 9.55 times the average salary and 9.67 times the average salary in 2017. 

Of the 330 local authority areas analysed, new-build homes became more affordable in 167 regions, representing improved affordability in over half of local areas.

The North West was the most affordable region with the average new-build price of £229,950 being 7.74 times the average salary of £29,700. This was followed by the North East where new-builds were 7.92 times the typical income. 

However, both these regions and seen affordability worsen slightly since 2019.

The East Midlands saw the largest improvement, dropping from 9.1 to 8.83 times salary, while affordability worsened in Yorkshire and the Humber, increasing from 7.88 to 8.33 times income.

London was the least affordable, with new-build prices of £560,000 being 14.51 times the average salary of £38,592. 

Paragon Development Finance managing director Robert Orr said: “Housing affordability remains an issue across the UK and, while it’s positive to see affordability for new-build homes improve across England and Wales, the sector needs to look at innovative ways to help people purchase new-build homes.  

“The stamp duty holiday, Help to Buy and the government’s 95 per cent mortgage guarantee scheme are certainly a step in the right direction, but the supply side issue needs to be addressed to get more new homes built, particularly by SME developers.

He added: “Government statistics show there were nearly 150,000 homes completed in England in 2020. While the year was obviously impacted by coronavirus and below historical average, there is a significant shortfall of new homes needed.”

 

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