The Affordability Gap
A home cost three anda half years' pay.
In 1997 a typical home in England cost 3.5 times typical annual earnings. In 2025 it cost 7.6 times, and more than 10 in London. Pick your region and see the gap, the rent, the years a deposit takes, and what closes it.
Figures checked 27 Sep 2026ONS, England and WalesSources
See it
A home against a year's pay, 2025
A typical home against typical earnings of people who work here.
Years to save a 20% deposit
At your savings rate, if prices stood still.
Private rent takes
Of the typical income of households renting privately, 2023-24.
Understand it
House prices pulled away from pay over two decades. Planning made new supply slow and uncertain, the country built too few homes where people wanted to live, and cheap credit poured into a stock of housing that grew slowly. Social homes sold under Right to Buy were not replaced one for one, so more people compete in a private market that has not kept pace.
These were policy choices, sustained by governments of both parties since the 1990s. The ratio has eased since its 2021 peak of 9.1, as pay rose faster than prices, and it is still more than double 1997. The gap punishes anyone who does not already own. It is fixable with the lever that made it: how much we build, and where.
England, the ratio over time
- 19973.5 times earnings.
- 20077.2, before the financial crisis.
- 20167.7, as prices recovered.
- 20219.1, the peak.
- 20257.6, as pay outpaced prices.
Fix it
Build to a binding target
Set a real housebuilding target and reform planning so it is met, year after year. Sustained supply is what brings prices back towards pay.
The trade-off
Existing owners accept more building nearby and slower growth in the value of their own homes.
Build social housing again
Replace the social homes sold off and never rebuilt, so lower earners are not pushed entirely into a stretched private market.
The trade-off
Large public capital up front, repaid over decades in lower housing benefit and steadier lives.
Give renters security
Longer tenancies and predictable rent rises, so the years spent saving a deposit are not also years of upheaval.
The trade-off
Tighter rules for landlords, set so they do not shrink the supply of homes to rent. Hard rent caps have done that elsewhere.
Sources and method
- ONS · Ratio of house price to workplace-based earnings (Table 1c, median), released 26 March 2026: England, Wales and the English regions, 1997 to 2025. Each year runs to September.
- ONS · Housing affordability in England and Wales: 2025: England at 7.6, down from 9.1 in 2021, as earnings rose faster than house prices.
- ONS · Private rental affordability, England, Wales and Northern Ireland: 2024 (Table 3): median private rent as a share of the median income of private renting households, financial year ending 2024.
- Diamond, McQuade and Qian · Rent control in San Francisco, American Economic Review, 2019: landlords under rent control cut rental supply by 15%.
The ratio compares the median house price with the median annual earnings of full-time employees who work in the area. Years to save = 20% of the ratio divided by the share of pay you save. It assumes prices and pay stand still and ignores interest, rent and tax, so it shows scale, not a forecast. Rent shares are for private renters' own incomes, which is why England's figure sits above most regions: London's high rents weigh on the average.