Tracking House Prices to find Britain’s Most Affordable Cities



With changes to the finance industry and an affordable housing pinch underway in the UK, many residents are choosing to rent, rather than wrestle with house costs and finance. Owning a house may still carry financial benefits, and some would-be buyers do opt-out for personal reasons. But there’s no doubt economic conditions prevent many Britons from entering the market – particularly in London and some other cities, where living costs are higher than most can afford.

Recently released HouseSimple data sheds light on house prices across the UK, ranking her most affordable cities.

Can You Afford to Live in London?

It is not unexpected to find London atop the list of least affordable cities in the UK. A key metric shows the number of homes for sale in the city that are priced below the UK average is less than 10% of the total inventory. In Bath, the figure is less than seven percent. These pricing realities may put a London address out of reach for many conventional buyers, unwilling to pay a premium for quarters within the city.

At the other end of the affordability scale, a few UK communities rank above 90%, listing homes below the UK average sales price. By this measure, Kingston-upon Hull is the UKs most affordable city, followed closely by three cities eclipsing the 90% mark – Birkenhead, Kilmarnock, and Middleborough. These affordable regional trends offer hope for first-time buyers, seeking value. And with half the housing inventory in Hull and Grimsby on the market for less than £100,000 there are still opportunities for buyers to step-in to ownership with a reasonable deposit. Where these areas furnish hope, popular cities such as Bath and Brighton have experienced sharp upturns in house prices, pulling them out of reach for many first-time buyers. In contrast to the UKs most affordable cities, £100,000 houses are nowhere to be found in these high-profile south-England areas.

Brexit, Inflation Exerting Forces on UK House Prices

First quarter data from Nationwide, a mortgage lender, points-up another UK housing trend worth noting. According to the firm, British house prices have dropped for the second month in a row. Brexit uncertainty and the looming June vote have driven inflation higher in recent months, with house prices showing modest declines. Monthly price decreases of .3 and .4 percent have been logged in March and April, respectively, representing the first drop since 2015.

Viewed as an annual trend, the numbers show an increase of 2.6% in house sales prices – the smallest such gain in four years. The April dip came as a surprise to many economists who expected modest growth during the period. And despite the recent decline, many observers still hold to a forecast of annual UK house sales price increases above 2% in 2017.

Loss of spending power has become a reality for Britons, following last year’s vote to leave the EU. Inflation has risen and the value of the Pound has dropped, likely contributing to lower house sales prices. Consumer confidence also appears to be waning as June’s vote approaches. And low wage growth and inflationary pressures may be stirring-up the Brexit pushback feared by its opponents.

With seemingly contradictory indications challenging economic analysis, it is hard to say whether or not the time is right to buy a house. In the UKs most affordable cities, first-time buyers can still stretch their resources to become home owners, but modest decreases in sales prices are unlikely to change the fate of London’s house shoppers. In fact, with stagnant wages and inflation complicating the picture, even a modest annual home price rise in 2017 may be enough to keep all but well-funded buyers on the sidelines.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK's most well-known financial institutions.

An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!

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