- The average UK home now costs 7.3 times average earnings, the lowest ratio since 2015.
- Elmbridge in Surrey is Britain’s least affordable local area at 17.4 times earnings.
- Inverclyde and Aberdeen are among the most affordable, at 3.5 times earnings.
Buying a home has become more affordable relative to earnings than at any point in 11 years, but the improvement is far from evenly spread across Britain.
According to new Lloyds analysis, the average UK home costs around 7.3 times average earnings, down from 7.6 a year earlier and the lowest price-to-earnings ratio recorded since 2015.
The calculation compares average house prices with average earnings, using data for April to June 2026 from the Lloyds House Price Index and Office for National Statistics figures.
The improvement has largely been driven by wages rising faster than house prices. But for buyers in some parts of southern England, the gap remains enormous.
Elmbridge in Surrey had the highest local price-to-earnings ratio at 17.4, followed by Kensington and Chelsea in London at 17.3. St Albans in Hertfordshire was third at 14.1.
London and the South East remain outliers
The South East recorded one of the biggest improvements over the past year, but it remained the second least affordable region, with the average home costing 9.1 times earnings, down from 9.7.
London’s ratio fell from 10.9 to 10.3, while Eastern England dropped from 8.7 to 8.2.
The South West also improved, from 8.2 to 7.7.
At the other end of the scale, the North East had the lowest regional ratio in England at 5.0, down from 5.1. Scotland was broadly unchanged at 5.3, while Yorkshire and the Humber fell from 6.0 to 5.8.
The North West improved from 6.5 to 6.3.
For first-time buyers, the national picture is somewhat better. The typical first-time buyer home costs 5.9 times average earnings, according to Lloyds.
However, a lower price-to-earnings ratio does not necessarily mean that buying a home is easy. Deposit requirements and mortgage rates can still determine whether a household can actually afford to make the move.
Andrew Asaam, mortgages director at Lloyds, said: “There are some encouraging signs for people looking to buy a home.
“Wages have continued to rise while house prices have remained relatively stable, helping to narrow the gap between earnings and house prices.”
But he warned that affordability remained stretched.
“Mortgage rates are higher than they were a year ago and saving for a deposit continues to be one of the biggest barriers facing first-time buyers,” Asaam said.
Where are homes cheapest compared with earnings?
The biggest differences emerge when the figures are broken down by local authority.
Inverclyde in Scotland and Aberdeen had the lowest price-to-earnings ratio at 3.5. Kingston upon Hull, Blackpool and Dundee followed at 3.6.
Dumfries and Galloway and North East Lincolnshire came next at 3.7, while Angus, Middlesbrough and East Ayrshire were each at 3.9.
At the opposite end, the most expensive areas relative to earnings were concentrated in London, Surrey and other parts of southern England.
After Elmbridge and Kensington and Chelsea, St Albans recorded a ratio of 14.1.
Hammersmith and Fulham, Waverley, and Westminster and the City of London were all at 13.3. Windsor and Maidenhead followed at 13.1, while Richmond upon Thames and Sevenoaks were both at 12.5.
Guildford completed the 10 least affordable local areas at 12.3.
The contrast is particularly stark when house prices are considered alongside the ratios. The average property in Elmbridge was priced at around £726,523, while the average home in Inverclyde was about £146,030.
That does not mean a buyer in Inverclyde necessarily has an easier route to home ownership. Earnings, employment opportunities, mortgage availability and deposits all vary between areas.
It does, however, show how different the relationship between local wages and property prices can be.
The most affordable local areas included:
- Inverclyde: £146,030, ratio 3.5
- Aberdeen: £147,851, 3.5
- Kingston upon Hull: £134,642, 3.6
- Blackpool: £141,550, 3.6
- Dundee: £152,072, 3.6
- Dumfries and Galloway: £153,360, 3.7
- North East Lincolnshire: £138,543, 3.7
- Angus: £160,928, 3.9
- Middlesbrough: £139,678, 3.9
- East Ayrshire: £162,459, 3.9
Northern Ireland was the exception to the wider improvement. Its average price-to-earnings ratio increased from 5.8 to 6.0 as house prices rose faster than wages.
Lloyds did not include Northern Ireland in its local authority rankings because of small sample sizes.
What does this mean for first-time buyers?
The improvement in the headline affordability ratio offers some relief, but the path onto the property ladder remains difficult for many households.
Lloyds said mortgage rates have increased the cost of borrowing despite the improvement in the underlying relationship between prices and earnings.
The bank has also pointed to smaller-deposit mortgage products as one potential route for some buyers.
“For first-time buyers in particular, a small shift in location could make a big difference, not just in getting on the ladder, but in what kind of property is within reach,” Asaam said.
“Many parts of Scotland and northern England continue to offer some of the best value relative to local earnings. For buyers with flexibility over where they live, that can make a meaningful difference to what they can afford.”
The Government has also announced its Your First Home scheme for first-time buyers in England, which is expected to allow eligible buyers to purchase new-build homes with a 2.5 per cent deposit, with the Government providing an additional 20 per cent towards the purchase price. Further details are expected in the Budget.
But even if the scheme helps some households with the deposit barrier, it will not erase the fundamental differences between Britain’s housing markets.
A buyer earning the local average faces a very different housing equation in Elmbridge or Kensington and Chelsea from one in Inverclyde or Hull.
The latest Lloyds figures therefore tell a story of improving affordability at the national level — but one where location still matters enormously.
The average UK price-to-earnings ratio may now be at its lowest in more than a decade. For many prospective buyers, however, the question remains less about whether Britain has become more affordable overall and more about where they can realistically afford to buy.