Homes for first-time buyers in Chichester have been labelled the least affordable outside of London, according to data from Nationwide. The average home in the city costs 8.5 times the annual earnings of the typical local full-time worker.
A “modest improvement” in affordability across the UK was noted using the data, as wage increases had outpaced house price growth in the past 12 months, whilst mortgage rates had also come down slightly.
Nevertheless, affordability remains stretched by historical standings, with first-time buyers across the country typically faced with paying around five times their earnings for a home, compared to a long-run average of around four times.
The least affordable area in the UK was Kensington and Chelsea in London, where first-time buyers have to pay an average of 13.6 times earnings. On the other end of the scale, Aberdeen was the most affordable area to buy, with homes costing an average of 2.5 times local salaries.
Rising rents have made it especially difficult to save the necessary deposit to buy a home. It is thought that 40% of first-time buyers have some assistance in raising a deposit; either from an inheritance or a gift/loan from family.
Further research by The Telegraph noted Chichester and Bognor Regis (as a combined area) as being the least affordable place in Sussex to live and work, when factoring in that 33.1% of a person’s income is spent on food, household bills and commuting costs.
The unaffordability of homes does not just affect youngsters of course. Older people who bought later in life can struggle to pay their mortgage before retirement. Then there are those who have never gotten on the ladder and need to keep a roof over their head when retired.
Despite these affordability challenges, house prices and mortgage market activity were resilient in 2024. House prices ended the year up by 4.7%, whilst mortgage approvals returned to pre-pandemic levels (despite average mortgage rates being around three times higher).
Given all of the above, it is amazing to note that first-time buyers share of mortgages was higher in 2024 (54%) than before the pandemic in 2019 (51%); further reflecting a drop in landlords purchasing new rental properties.
