The ratio of house prices to earnings remained below the 2007 peak in England, according to the most recent data, published by the House of Commons Library.
The data showed that in 2013 the ratio of lower quartile house prices to earnings was 6:45 compared with a pre-crash peak of 7:25.
The local authority area where this was highest was Kensington and Chelsea, where the ratio of house prices to earnings was 26:81.
According to the research by the House of Commons Library, the average UK property price increased from £186,544 to £194,258 – or 4.1 per cent – in the year to Q2 2015.
The area that saw the largest average increase in house prices was London, where they went up by 7.3 per cent. The smallest increase – of 0.1 per cent – was in the North.
Adviser view
David Hollingworth, associate director of Bath-based London & Country Mortgages, said: “When you start talking about affordability you have to put it into context with where interest rates are now, which is rock-bottom compared with 2007.
“From an affordability perspective it is quite a different picture, but with house prices on the rise that will inevitably apply pressure when wage growth has been more muted.”
