Chichester is the least affordable area outside London for first-time buyers to get on the property ladder, with homes in the cathedral city costing an average of 8.5 times the annual earnings of the typical full-time worker in the area, according to figures from Nationwide.
The building society said there had been a “modest improvement” in affordability across Great Britain over the past year, as wage rises had outpaced house price growth, and mortgage costs had fallen slightly.
However, affordability remained stretched by historical standards, and first-time buyers typically faced paying five times local earnings for a home, above a long-run average of 3.9 times.
The least affordable local authority in Nationwide’s index was the London borough of Kensington and Chelsea, where first-time buyers need to pay an average of 13.6 times earnings.
Chichester, in West Sussex, came second, followed by Three Rivers, in Hertfordshire. The latter local authority, which includes Rickmansworth, has an average first-time buyer house price that is 7.8 times local earnings.
At the other end of the scale, Aberdeen was the most affordable place to buy, with homes costing 2.5 times local wages.
Rising inflation has led to pay increases which have helped aspiring homebuyers, but there are still significant affordability hurdles.
Nationwide said rising rents had made it difficult for people to save, and that in 2023-24 about 40% of first-time buyers had some assistance to raise a deposit, either in the form of a gift or loan from family or friends, or an inheritance.
While its headline figures used averages across all jobs, analysis of affordability based on profession showed the challenge faced by those in low-paid sectors.
Andrew Harvey, a senior economist at Nationwide, said: ““Affordability is most challenging for those working in areas classified as ‘elementary occupations’, which include jobs such as construction and manufacturing labourers, cleaners and couriers, and those in care, leisure and other personal service jobs. In these groups, typical mortgage payments would represent over 50% of average take-home pay.”
Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “The good news is that homes are very slightly more affordable than they were this time last year – the bad news is that they’re so far out of reach that a slight improvement is about as useful as a 10% discount on a diamond encrusted tiara.”
Coles said unaffordable house prices were not just a problem for young people trying to get on the property ladder. “It’s a major issue for older people who bought later and have a battle on their hands to pay the mortgage before retirement,” she said.
“It’s also a serious problem for those who have given up entirely on owning a home of their own and need to keep a roof over their head in retirement.”
