LONDON — The gulf between London and the southeast’s property market and the rest of the UK is staggering — particularly when it comes to affordability.
While housing across the country has become more than twice as unaffordable on average in the past two decades, the gap between so-called “prime” central London areas — where housing is most unaffordable — and the UK’s most affordable areas has widened by an even bigger factor.
Statistics released by the Office for National Statistics on Friday show the extent of the differences. Not only are houses in the London borough of Kensington and Chelsea incredibly expensive — an average of more than £1.2 million — they’re also worth an average of 38 times UK earnings.
“In 2016, Kensington and Chelsea was the least affordable area to buy a property in England and Wales. It had the highest ratio of house prices to annual earnings, with house prices being 38.5 times the median gross annual earnings,” the ONS’ release said. “This has increased since 1997 when house prices were 11.8 times earnings.”
By contrast, Copeland in the northwest county of Cumbria had the most affordable housing in 2016, although prices were still close to three times average earnings.
“Although Copeland is the most affordable local authority in England and Wales, it does not mean that this local authority has the lowest house prices or the highest earnings; rather it has the highest earnings in relation to the house prices,” the ONS said.
The chart from the ONS below illustrates the issue of the stretching gap between the most and least affordable parts of the country. While prices in Copeland have increased a little in terms of affordability, Kensington properties have spiked upwards:
More from Business Insider UK:
- An internet security expert says a cyber arms race has just begun — and the big players might surprise you
- The billionaire founder of Zara made another €1.2 billion this week
- The CEO of tech giant VMware gave us his best advice for becoming a CEO
- 2 major hurdles in the way of Nicola Sturgeon’s mission to make Scotland independent
- The lack of mortgage defaults is masking a huge problem in the UK economy
NOW WATCH: Robert Shiller on what a rate hike will do to asset prices and who Trump shouldn’t put in charge of the fed
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.