July’s House Price Index updates potential hotspots for landlords looking to invest in buy to let property in different parts of the country.
Reported by Landlord Today on the 23rd of August, the figures indicate the affordability of property in terms of average prices and earnings in the respective areas.
The combination of stagnating property prices and increases in average earnings has helped to make housing more affordable in a number of major cities says the Index.
In the most expensive cities – such as London, Oxford and Cambridge – where property prices are between 12 and 13 times greater than average earnings, the improvement in affordability has been understandably quite modest, yet is still better than prices were at their height in June 2017.
Other cities in the south of England, such as Bournemouth, Bristol, Portsmouth and Southampton, which have long been favourites for buy to let investors, have also seen fairly modest improvements in affordability. Prices there are between around 7.5 and 9.5 times average earnings, thanks to the relative fall in prices compared to rising average pay.
The improvement in affordability in southern England may be slight. But this has resulted in a strange turn of the books whereby house prices in less expensive northern cities are actually outstripping the increase in average earnings – so that the north of England is becoming relatively less affordable and not so much of a hotspot for buy to let investment.
Nevertheless, there remains a huge variation in the affordability of housing across the country – with prices at more than 13 times average in earnings in London to a low of just 3.7 times average pay in Glasgow.
