Which is the UK's least affordable city?

Emma Woollacott
Oxford University, England, UK  All Souls College Built Structure Day Famous Place Ornate Outdoors Oxford Roof University Urban
Oxford University, England, UK All Souls College Built Structure Day Famous Place Ornate Outdoors Oxford Roof University Urban

Londoners may find it hard to believe, but the capital isn't the UK's least affordable place to live - it's Oxford.

New research from University of Oxford geography professor Danny Doring shows that the average price of a house in the city has gone up by almost £38,000 over the last year to £426,720, over 16 times the local average income of £26,500.

Meanwhile in London, average prices have increased by £45,620 to £501,520, representing 15.7 times the average income of £31,950.

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Other areas with house price to income ratios of more than 10 include Cambridge, Brighton, Reading and Milton Keynes. But even the most affordable cities in the country have house price to income ratios that make getting a mortgage difficult: in Liverpool the ratio's 5.8, in Derby it's 6.2 and in Nottingham it's 6.8.

"Compared with earlier decades, house prices across the UK are extremely high when compared with the average take home pay," says Professor Dorling.

"The more 'affordable' parts of the country also have high ratios, that just look relatively better compared with the unprecedented expense of current housing costs in London and Oxford."

The figures were compiled from government data for a new edition of Professor Dorling's book All That Is Solid, an assessment of Britain's housing crisis, which argues that the current market is unsustainable.

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"Fewer and fewer people are able to get a mortgage as stricter tests are imposed to prevent the banks from lending as recklessly as they did before," he says.

"Meanwhile, at least a third of those with mortgages would struggle if mortgages were to rise by even a couple of percentage points at some point in future years. The further that house prices rise, the greater that proportion will grow, leaving a growing proportion of people with no option but to rent."

Oxford's big problem is a shortage of housing - the City Council reckons it needs between 24,000 and 32,000 new houses over the next 16 years - combined with a lack of space on which to build. The city's green belt is very tightly defined, and there's little space left within it.

Oxford is also seeing an influx of wealthy Londoners, attracted by the city's excellent fee-paying and state schools, and by prices that, while high, are still lower than the capital. Transport links are good, with London only an hour away by train, and with a new high-speed link due to open this summer from a station currently being built just to the north of the city.

High-end estate agent Knight Frank reports that last year more than half its sales were to people from outside the city, up from just a quarter the year before. And demand from Londoners rose by an astonishing six times to represent 18% of sales.

House prices in prime areas of the city have risen twice as fast in the last year as the rest of the UK, up by 6.1%, compared with 3.4% for the rest of the country.

Oxford City Council has just signed off its biggest house-building scheme in 20 years, which will provide 885 homes in Barton Park. Work is scheduled to start in the next few months. Other big developments are planned around the edge of the city, but are not expected to fill the housing gap.

Professor Dorling believes that nearby towns such as Didcot and Witney should also be the focus of house building, with light rail links into the city.

A firsthand experience of buying in Oxford, the least affordable city, by Emma Woollacott

I moved to Oxford four years ago, and scraped in by the skin of my teeth. I was chain-free, and naively assumed that this would make me an attractive buyer; but boy, was I wrong.

Two slightly cheeky offers and two asking price offers later, I realised that you need substantially more than that - preferably in cash, in a gold-plated box - to have any chance of buying in this city. I offered £10,000 above the asking price for my dream house, only to see it go to someone with £20,000 more.

Part of the problem was that I was dead set on being in the catchment for Cherwell School - which, unfortunately, overlaps fairly neatly with Summertown and Central North Oxford, where prices for a two-bedroom flat can hit £750,000.

At the time, there were a few much cheaper streets - which is why I'm here. But as the new data shows, there's not much affordable any more, and the vast majority of people that work in Oxford have little chance of getting a big enough mortgage to buy here.

Nor can anybody with an average income afford to move. The recent changes to stamp duty levels don't help many people here, and in any case moving to a house with one more bedroom can easily mean paying £100,000 more. Instead, everybody - me included - is converting their loft, meaning even fewer small, lower-cost homes.

It's hard to see a solution. It's not just the green belt that makes it difficult to build around the edge of the city; it's the difficulty of providing transport too. The city centre is a warren of little streets that are totally unsuitable for heavy traffic, and, because so many workers have to live elsewhere, the main roads in are already solid with cars at rush hour. One of my daughter's friends comes to school on the bus, and has to allow an hour and a half for the four-mile journey - even though most of this is in a dedicated bus lane.

Professor Dorling's idea of satellite towns with light rail links might work; otherwise, we'll need to wait for university scientists to invent jetpacks or teleportation.

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