The housing affordability gap between the most and least costly places to live in England and Wales has narrowed for the first time in four years.
Kensington and Chelsea in London remained the least affordable place to live last year, with the average property costing nearly 40 (39.6) times local annual wages, according to Office for National Statistics (ONS) figures.
However, this was an improvement compared with 2018, when house prices in the borough were 44 times annual earnings on average.
Across England generally, housing affordability saw its first significant improvement for a decade in 2019, mainly due to price falls in the least affordable areas.
Wales did not see much of a change in housing affordability, the ONS said.
Housing affordability improved significantly in England in 2019, but not in Wales.— Office for National Statistics (ONS) (@ONS) March 19, 2020
Full-time employees in England could spend 7.8 times their workplace-based annual earnings buying a home, while in Wales they expect to spend around 5.8 times earnings https://t.co/NDv6x1LXrx pic.twitter.com/a8QLYkfCnX
Copeland, in the North West of England, remained the most affordable local authority in England and Wales in 2019.
There, the average price paid for properties was estimated to be 2.8 times average annual earnings.
That was a slight increase from 2018, but not statistically significant, the ONS said.
This meant the difference between the local authority area with the highest average property price-to-income ratio, at 39.6, and the place with the lowest house price-to-income ratio, at 2.8, narrowed to 36.8 in 2019.
The ONS said it was the first decrease in the affordability gap since 2015, with a gap of from 41.5 having been recorded in 2018.
New-build or existing property?— Office for National Statistics (ONS) (@ONS) March 19, 2020
Newly-built dwellings were still less affordable than existing dwellings in both England and Wales in 2019, at around 9.6 times average annual earnings in England and 8.3 times average annual earnings in Wales https://t.co/mPgqdTFYaL pic.twitter.com/iBIyqa7rCS
The London housing market saw a slowdown last year amid uncertainty over Brexit and the wider economy.
In early 2020, there had been some signs of the property market picking up once more, as the December 2019 general election appeared to have brought more certainty.
The recent Budget announcement of a stamp duty surcharge for non-UK residents also brought speculation that there could be a fresh rush of overseas buyers looking to snap up London properties before the change kicks in.
But, amid the spread of coronavirus in recent days, estate agents have been reporting a sharp drop-off in property viewings.
The ONS figures also showed that, in 2019, full-time employees could typically expect to spend around 7.8 times their annual earnings on purchasing a home in England.
This was an improvement from the previous year, when the ratio was 8.0.
In Wales, full-time employees could typically expect to spend around 5.8 times their annual earnings on purchasing a home, which was not significantly different from 2018.
Weâve also published more detailed analysis of affordability that is slightly different to the official measures.— Office for National Statistics (ONS) (@ONS) March 19, 2020
Find out how affordable housing is in your area, as well as the affordability of mortgages and rent, using our new explorer https://t.co/awd0Ct6h5R pic.twitter.com/vvOQHBff21
Newly-built homes were less affordable than existing properties in both England and Wales in 2019, costing around 9.6 times average annual earnings in England and 8.3 times average annual earnings in Wales.
ONS head of housing analysis Nigel Henretty said: “This is the first significant improvement in housing affordability in England for 10 years.
“While housing remained significantly more affordable in Wales than in England, the gap between the most affordable and least affordable local areas decreased for the first time in four years. This was driven mainly by decreasing house prices in the least affordable areas.”