Full-time employees could expect to spend approximately 7.8 times their workplace-based annual earnings on purchasing a home in England in 2019, new data published by the Office for National Statistics (ONS) revealed.

The data showed this was a significant improvement from the previous year, when the ratio was 8.0.

In Wales, the ONS revealed a full-time employee could expect to spend around 5.8 times their workplace-based annual earnings on purchasing a home, which was not significantly different to 2018.

In both England and Wales, the ONS also revealed that earnings increased proportionally more than house prices in 2019 – suggesting this made housing more affordable. In England, the median price paid for properties increased by 0.02% in 2019 compared with 2018, with earnings increasing by 2.7%, while in Wales, the data showed house prices increased by 2.6%, with earnings increasing by 4.4%.

At the local level, earnings increased by more than house prices in around 60% of local authority districts, leading to improvements in housing affordability in these areas. However, the ONS reported that these were not statistically significant changes.

Hargreaves Lansdown personal finance analyst, Sarah Coles, suggested that in many parts of the country, 2019 felt like a “great year” to be moving onto, or up the property ladder, as “sluggish house prices” and rising wages made houses more affordable.

“But 2020 is going to be much tougher all round,” Coles said. “Sellers face the prospect of falling values – and may well be reluctant to have viewers wander round their home – so the market could freeze up.

“It means that while prices are theoretically dropping, there could be nothing around to buy. Buyers may dry up too, put off by the prospect of snapping up a home that falls in value even before they’ve exchanged contracts.

“For those who have just bought a house, things could look pretty grim for a while – particularly if you’ve snapped up a new build. The premium on brand new property evaporates as soon as you’re in through the front door, so once the market struggles, you could quickly find yourself in negative territory.”

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