Would-be homeowners could need to borrow more than 11 times the average income just to buy a house in some parts of Merseyside.
Homes across the country are nearly twice as unaffordable as they were just over twenty years ago. The dream of owning a home seems more out of reach in some areas than others, according to exclusive analysis of figures from the Office for National Statistics.
The average family needs to borrow 11.2 times the local average yearly income to afford a home in the Calderstones area of Liverpool, making it the least affordable area in the region. Across England and Wales, the average house cost roughly 8.9 times the average income in the year to September 2021, up from 5.1 times in the year to September 2002.
READ MORE: Average UK house price ‘surged by £33,000 over past year’
In Merseyside, the ratio ranged from 6.6 times average incomes in Wirral, to 5.1 times average incomes in Knowlsey. These figures look at the income of every household member, plus any income from benefits, before things like tax, national insurance and pension payments are taken into account.
A comparison of separate figures at a neighbourhood level (areas of about 7,200 people), using net household incomes that take these payments into account, shows the true reality of getting on the property ladder can be even more stark at a local level.
In Merseyside's least affordable neighbourhood is Calderstones, the average net household income is an estimated £43,436 a year, the average house sold for a whopping £485,000 in the year to September 2020. Meanwhile, a house in one neighbourhood in the Bootle North area of Sefton - the most affordable in Merseyside - could be bought for just 2.5 times the average household income.
There, the average net household income in Bootle is an estimated £29,680 a year, and the median house price is just £75,000.
You can see the figures for your neighbourhood using our postcode search interactive.
Since 2014, the Bank of England has set the maximum ratio of loans as 4.5 times income. Only 15% of all mortgages are allowed to exceed this. Based on this level of maximum borrowing, only 31% of neighbourhoods across Merseyside are actually affordable to those living there, on average. However, it’s important to note that the figures don't include any deposit that a family might have saved.
Across England and Wales, the least affordable area to buy a house is in a neighbourhood in the Knightsbridge, Belgravia and Hyde Park area of Westminster, London. The average house price there, at £2.5 million, is 70.8 times the average income.
Outside of London, the most expensive neighbourhood is in the Oxshott and Stoke D'Abernon area of Elmbridge, Surrey, where homes typically sell for £1.2 million - 25.0 times the average income. Meanwhile, the most affordable place to buy a house is in a neighbourhood in the Ayresome area of Middlesbrough, where the average cost of a property in the year to September 2021 was £45,000. That’s just 1.7 times higher than the average income.
Overall, just 12% of neighbourhoods across England and Wales would be affordable to the average household, based on maximum borrowing levels of 4.5 times income.
The 10 most expensive neighbourhoods in Merseyside
Local Authority // Neighbourhood // Average income // Average house price // Difference
Liverpool // Calderstones // £43,436 // £485,000 // 11.2
Wirral // Caldy and Newton // £45,819 // £457,000 // 10
Sefton // Formby West and Freshfield North // £37,587 // £365,000 // 9.7
Sefton // Birkdale // £29,246 // £277,500 // 9.5
Wirral // Gayton and Lower Heswall // £45,386 // £430,000 // 9.5
Sefton // Blundellsands // £36,829 // £343,750 // 9.3
Liverpool // Gateacre // £34,229 // £300,500 // 8.8
Wirral // West Kirby // £32,713 // £285,000 // 8.7
Sefton // Formby Central and Freshfield South // £34,662 // £290,000 // 8.4
Sefton // Hightown and Thornton // £32,713 // £271,500 // 8.3
The 10 most affordable neighbourhoods in the area
Local Authority // Neighbourhood // Average income // Average house price // Difference
Sefton // Bootle North // £29,680 // £75,000 // 2.5
Wirral // Birkenhead Central // £30,980 // £80,000 // 2.6
Liverpool // Walton South // £26,972 // £72,000 // 2.7
St. Helens // Town Centre East and Fingerpost // £25,347 // £70,000 // 2.8
Wirral // Seacombe // £27,947 // £80,000 // 2.9
Liverpool // Anfield East // £26,538 // £80,500 // 3.0
Liverpool // Wavertree West // £29,896 // £90,000 // 3.0
Liverpool // Toxteth Park // £32,171 // £95,500 // 3.0
Liverpool // Kirkdale North // £25,672 // £80,559 // 3.1
Sefton // Seaforth South // £27,838 // £85,500 // 3.1
