England Housing Affordability Best in Decade, Iran War Threatens

Housing affordability in England reached its most favorable level in a decade last year, as wage growth significantly outpaced sluggish property price increases, according to official statistics released by the Office for National Statistics. However, the outbreak of war in Iran has introduced new pressures, with rising mortgage rates and energy costs threatening to reverse recent gains and further challenge prospective homebuyers.

The ONS data, covering 2025, showed that the median house price in England stood at £300,000, equivalent to 7.6 times the median annual earnings of £39,300 for full-time employees. This marked the lowest affordability ratio since 2015 and a decline from 7.8 in 2024 and a peak of 9.1 in 2021. Across England and Wales, house prices rose just 5 percent since 2021, while median earnings increased by 25 percent over the same period, easing the financial burden on potential buyers despite persistent high values relative to incomes.

London, long the least affordable region with average homes priced above £500,000, saw the sharpest improvement. Prices there equated to 10.6 times earnings in 2025, down from 12.9 in 2021 and the lowest since 2014. Yet the...