From MoneyWeek · · 1m 40s
Lloyds: House Price Affordability Hits 11-Year High
UK house prices now cost 7.3 times median earnings, down from 7.6 in 2025, but mortgage costs rise.
In brief
UK house prices now cost 7.3 times median earnings, down from 7.6 in 2025, but mortgage costs rise. Lloyds Bank reports UK house prices cost 7.3 times median earnings, the lowest since 2015, but higher mortgage rates strain affordability for buyers. Originally reported by MoneyWeek.
House Price Affordability
The average UK home now costs 7.3 times median earnings, down from 7.6 in 2025 and at its lowest point since 2015.
House Price Growth
Lloyds data showed the average UK house price rose by 0.5% to £299,131 between Q2 2025 and Q2 2026.
Earnings Growth
Median earnings went up by 4.5% to £40,790 over the same period.
Mortgage Rate Spike
Higher mortgage rates resulting from the Middle East conflict counteract affordability improvements.
Mortgage Payment Rise
The average monthly mortgage payment rose from £1,100 to £1,157 between Q2 2025 and Q2 2026.
First-Time Buyers
The average property price for first-time buyers rose by 0.3% to £239,681 between Q2 2025 and Q2 2026.
First-Time Affordability
The average UK first home now costs 5.9 times median earnings, down from 6.1 in 2025.
First-Time Savings
First-time buyers typically need to save around £24,000 for a 10% deposit.
London Affordability
London and the South East remain the least affordable places to buy a home based on local house prices relative to median incomes.
Regional Affordability
The house price to income ratio fell from 10.9 to 10.3 in Greater London and from 9.7 to 9.1 in the South East between 2025 and 2026.
Northern Ireland
Northern Ireland was the only UK region where homes became less affordable between 2025 and 2026.
The headline
Lloyds Bank reports UK house prices cost 7.3 times median earnings, the lowest since 2015, but higher mortgage rates strain affordability for buyers.
