With house prices rising & mortgage rates remaining high, I found the cheapest place in Lancashire to buy

According to the Office of National Statistics, housing affordability improved in three-quarters (75%) of local authorities across England and Wales in 2023 compared to the previous year. This is due to the fact that, while, average house prices increased in just over two-thirds (69%) of areas compared with 2022, average earnings increased in a bigger proportion of areas, at 88%.

Kensington and Chelsea in London was the least affordable area last year, with an average house price-to-earnings ratio of 34.3, while Burnley in Lancashire was the most affordable, with an average house price-to-earnings ratio of 3.7.

In 2023, 7% of areas typically had homes selling for less than five times the average earnings of workers, which represents an improvement compared with 2022, but a stark decline when comparted to 1997, when 88% of areas had this ratio.

"Affordability remains considerably worse than at the start of the series," the ONS report concludes.

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Looking at England, in the 12 months to September 2023, the average home sold for £290,000, while average full-time earnings were £35,100. This means that, in England, full-time employees could expect to spend 8.3 times their earnings on purchasing a home in their local authority area.

This represents an overall improvement in affordability compared with 2022, when the average home in England cost around 8.5 times the average wage. House sales prices have become more affordable since 2021, but remain in line with pre-coronavirus pandemic trends, the ONS said. The affordability ratio doubled in England from the start of the records in 1997 to 2007.

In 1997, a home in England was worth around three-and-a-half times the average wage, but by 2007 buyers faced paying just over seven times their salary typically to buy a home.

Mortgage rates have jumped amid increases in the Bank of England base rate, meaning that some existing homeowners could have a payment shock when their deal expires. Recent signs that inflation is cooling have raised expectations around the potential for the Bank of England to start cutting the base rate in the months ahead.