Oxford is the most unaffordable place in Britain in which to buy a house, with a property price to earnings ratio that even outstrips London, new analysis has found.
Average house prices in the city are 16.1 times the local average annual income compared with 15.7 times in London, according to research by an Oxford university professor.
The average cost of a house in Oxford in 2014 was £426,720, with the city’s workers earning on average £26,500 a year.
In London the average house price was £501,520 and the average wage £31,950 a year.
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Other areas ranked in the top five most unaffordable areas in Britain, with house price to income ratios of more than 10, included Cambridge, Brighton, Milton Keynes and Reading.
“Compared with earlier decades, house prices across the UK are extremely high when compared with the average take-home pay,” said Danny Dorling. “‘Fewer and fewer people are able to get a mortgage.”
At least a third of those with mortgages would struggle if interest rates were to rise by “even a couple of percentage points”, he said. “The further that house prices rise, the greater that proportion will grow, leaving a growing proportion of people with no option but to rent.”
Oxford’s house prices have been driven up by the number of London commuters who have moved out of the capital to escape eye-wateringly high house prices.
This combined with restrictive planning laws protecting the greenbelt around the city from housing development have pushed up prices in Oxford, Mr Dorling said.
He also emphased the housing supply crisis which underpins house price growth in areas of high demand.
This analysis follows the English Housing Survey which found that the proportion of households who owned their property outright was larger than the proportion who owned with a mortgage, exentuating the difference between the 'haves and have nots.'
The annual report also showed a growing number of renters.
Lucian Cook, head of residential research at Savills, said: "The English Housing Survey lays bare the generational divide in housing with older households continuing to benefit from the growth in home ownership and accumulation of equity in the second half of the 20th century, with younger households suffering from a lack of access to home ownership in the 21st."
"We urgently need a co-ordinated, long term response to the housing crisis rather than short term populist policies that only address a few of the symptoms. A new government will need to front up to the need to provide a bigger, better private rented sector and find ways to encourage the recycling of existing housing wealth so younger households can get on and trade up the housing ladder."
With media focus on Oxford, worth noting houses prices in the most expensive area 6 times those in the least pic.twitter.com/2jlP5RyW8z
— Lucian Cook (@LucianCook)
February 26, 2015
