More than half of two and three-bedroom houses for sale in the UK are now within reach of households earning the average income, according to research from property portal Zoopla. The study found that 51% of family homes are listed with an asking price below £301,000, an increase from 45% a year ago.
This £301,000 threshold represents the maximum a household with a combined income of £53,500 can afford, based on a mortgage of 4.5 times income and a 20% deposit. The improved affordability means 84,300 houses are now accessible to average earners, as wage growth continues to outpace house price increases.
Despite this improvement, sales agreed remain 9% lower than the same period last year. Richard Donnell, executive director of Zoopla, noted that higher mortgage rates are offsetting the benefits of increased affordability, adding to the monthly costs of new mortgages.
Southern and eastern England have seen the most significant improvements in affordability, with the South West recording a 9.8 percentage point jump to 47% of affordable houses. The East of England rose 9.2 percentage points to 39%. Northern regions showed smaller gains, with the North East leading at 83% of family homes priced below the threshold.
The South East remains the least affordable region at 23%, with an average asking price of £375,000. London has fewer than 100 two and three-bedroom houses priced below the £301,000 threshold.