UK home affordability reaches lowest ratio since 2015

Lloyds Banking Group said UK homes became more affordable relative to earnings in the second quarter of 2026, with the average property costing 7.3 times earnings, down from 7.6 a year earlier. The ratio was its lowest since 2015, according to the bank’s analysis, but rising mortgage costs and the need to save for a deposit continued to weigh on buyers. Between the second quarter of 2025 and the same period in 2026, average UK house prices rose 0.5% to £299,131, while earnings increased 4.5% to £40,790, Lloyds said. The figures indicate that earnings grew faster than prices over the year. They compare average home prices with earnings and do not establish whether buying is affordable for individual households. For first-time buyers, the average home cost 5.9 times earnings, down from 6.1, Lloyds reported. The average first-home price rose 0.3% to £239,681. The bank also said average monthly mortgage payments across the UK increased from £1,100 to £1,157 over the year. Its figures put first-time-buyer mortgage payments at about 34% of income, compared with 41% for renters. Affordability varied sharply by location.