  How is the Housing Affordability Ratio Measured? This housing affordability report displays the difference between geographical areas in the average (median) house price relative to average (median) workplace-based earnings. The housing affordability ratio is measured by taking the average house price in an area and dividing that figure by the average earnings value in that same area. This only shows housing ownership affordability, rental affordability is measured differently. The latest housing affordability data Between 2012 and 2022, there has been diverging housing affordability between the North East LEP area and England excluding London. The North East LEP area has maintained an average housing affordability of roughly 5 (average house prices are five times the average earnings), whereas the England excluding London area house price affordability ratio has risen to 9 from over 7 across the same time period (houses have become less affordable). This equates to a c.25% increase. The England excluding London house affordability value reduced from 9.5 to 9 between 2021 to 2022. Given the reported inflation rate and decreases in housing prices throughout 2023, this value might change significantly in 2023. Housing affordability varies by a maximum of 1.4 between the Local Authorities within the North East LEP area. North Tyneside is the area which has the least affordable houses given the local area earnings, at 5.7. Sunderland has the most affordable housing given local earnings at a ratio of 4.3. When comparing the North East against the Core City areas, the North East has the most affordable housing (to own). Three other areas in the North of England: Leeds, Liverpool, and South Yorkshire all have ratios of between 5 and 6. The least affordable comparators are Greater Manchester and the West of England, the latter has a ratio of almost 10. |
