England and Wales housing affordability improves to pre-pandemic levels

Housing affordability in England and Wales has improved, returning to levels seen before the COVID-19 pandemic. This change is primarily due to wages increasing faster than house prices, according to recent official data. Last year, the typical home price in England averaged £290,000. This was equivalent to 7.7 times the average earnings of full-time workers. In comparison, the ratio was 7.9 in 2019 and peaked at 9.0 in 2021. During 2020 and 2021, house prices surged due to low interest rates and government incentives aimed at helping home buyers. However, since then, home prices have only increased by 1%, while wages rose by 20%. This period of economic change has been marked by rising inflation and interest rates. These factors have led to fewer home sales and a decrease in home prices, ultimately boosting wages in the process.