Homes in Preston are getting more affordable

The good news for prospective buyers in Preston is that houses became slightly more affordable in 2018, new figures show.

Friday, 29th March 2019, 3:29 pm
Updated Friday, 29th March 2019, 4:38 pm
Prospective buyers need around six times their annual salary to buy a home in Preston

Each year, the Office for National Statistics calculates how affordable housing is in England and Wales, by dividing the median house price in local authorities by the median full-time annual income.

The lower the ratio is, the more affordable homes are to buy. The Office of National Statistics (ONS) uses the median instead of the mean as the average, which is the exact middle number in a series, so not distorted by the extreme highs and lows.

In Preston last year the affordability ratio was 5.5.

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That means prospective buyers need around six times their annual salary to buy a home.

That's four per cent lower than in 2017, when the ratio was 5.8.

While house prices have continued to rise, the average annual salary increase has outstripped that.

Median yearly earnings in Preston have risen by seven per cent, and the average house price has increased by three per cent in 2018.

Despite the recent improvement in the affordability ratio, house prices have increased drastically since 2002, when the ONS first began comparing this data.

The average home in Preston then cost £58,500. The 2018 figure is 144 per cent higher. In that time the average annual salary has only increased by £6,469, a 33 per cent rise.

Across England and Wales, the affordability gap between the most and least expensive places to live is at its widest since records began.

Polly Neate, chief executive of the housing charity Shelter, said: "The figures leave us in no doubt that owning a home is an all-but-impossible dream for millions of working families.

"Combined with the dire lack of social homes, this has left huge numbers of people with no choice but to rent privately."

"It cannot be right that so many families, especially those on lower incomes, now face a lifetime in deeply unstable private renting, where they’ll have to pay well over the odds to keep a roof over their head.

"More families desperately need the option of social housing, and they need it now."

Preston's affordability ratio is below the average for England and Wales, which is 7.8.

Nigel Henretty, head of housing analysis at the ONS, said: "After five years of decreases, the estimated affordability of homes in England and Wales remained static in 2018.

"It's also notable that the estimates show newly built homes remained significantly less affordable than existing properties."