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ONS Housing Affordability Data (2022) - what do the numbers mean?

On 22 March 2023 the Office for National Statistics (ONS) published the annual data update on house prices and annual earnings. This data is utilised to calculate the affordability ratios at a national a subnational level, in English - how much do houses cost compared to how much people earn.

To preface, the values recorded are average (median) estimates published by the ONS. These are based on the 12 month period up to September 2022 and the 'income' is the workplace-based-full-time-earnings.

So, let's get down to brass tax - what do the numbers say and what do they mean?

In England, the average house price is £275,000 compared to the average income of £33,200. This means that employees in England can expect to spend 8.3 times their annual earnings on a home.

In Wales, the average house price is £190,000 and average income is £30,600. This means that employees in Wales can expect to spend 6.2 times their annual earnings on a home.

The good news is that this is a significant improvement in affordability from the previous annual update, when the 'affordability ratio' (multiplier for income to house price) was 9.1!

However, this is not the whole picture. Many factors outside this data impact real terms affordability, including:

  • Cost of living

  • Mortgage availability (and interest rates)

  • Private rental costs (ability to save for a deposit)

  • Location factor (i.e.- are the homes proportionately affordable in areas compared to their income, a consideration which is different in each local authority area and also for each potential buyer)

Viable Placemaking have recently published two twin Briefing Notes on the housing crisis in 2023 and affordability, which highlight the importance of the provision of new homes.

If you are preparing a planning application or appeal and would like to consider the economic implications of your development, including those on affordability, please feel free to get in touch.


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