New analysis has revealed the most and least affordable boroughs when buying a home in London. Barking and Dagenham was named the most affordable, with an average property price of £322,675, 6.2 times average earnings. The least affordable was the Royal Borough of Kensington and Chelsea, with an average house price of £895,893, 17.3 times the average salary.
Affordability improving across the capital
London is still the least affordable place to live in the UK, but affordability is improving in the capital, the analysis by Lloyds found. The bank said housing affordability in the UK has reached its most favourable level in more than a decade when comparing the price of an average home with wages.
Lloyds calculated that the average UK home costs around 7.3 times average earnings – the lowest price to earnings ratio since 2015 and down from 7.6 a year ago. The average home in London costs 10.3 times the average salary, but this was a fall from 10.9 times the average salary a year ago.
Wage growth narrows the gap
The bank said the rate of wage growth has outpaced house price increases over the past year, narrowing the affordability gap. Lloyds’ calculations compared figures for April to June 2026 with the same period in previous years, using data from its house price index and Office for National Statistics (ONS) figures.
For first-time buyers, the average UK home costs just under six times earnings, with a ratio of 5.9, Lloyds said.
What buyers should consider
Andrew Asaam, mortgages director at Lloyds, said: “There are some encouraging signs for people looking to buy a home.
“Wages have continued to rise while house prices have remained relatively stable, helping to narrow the gap between earnings and house prices.
“However, affordability remains stretched for many households.
“Mortgage rates are higher than they were a year ago and saving for a deposit continues to be one of the biggest barriers facing first-time buyers.
“Buyers may have more options than they realise, including mortgages designed for those with smaller deposits.
“While these won’t be right for everyone, they can help some buyers take their first step onto the housing ladder sooner.”
