An estate agent says the borough remains an “achievable” place to buy a home as house prices remain high across the country.
Figures from the Office for National Statistics (ONS) show full-time employees in Bury could expect to spend 7.3 times their annual earnings on purchasing a home in 2023 – close to the ratio of 7.8 the year before.
The data shows residents in Bury spent less of their annual earnings on a home last year than the average buyer in England, where a house cost 8.3 times the average wage.
In England, the average home sold for £290,000 in the 12 months to September, while the average full-time wage was £35,100.
Houses in Bury were two per cent more expensive in 2023 than the year before, at an average price of £225,000. In the meantime, wages saw a 9.4 per cent year-to-year increase.
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Andrew Cardwell, managing director of Cardwells Estate Agents, says the figures show Bury remains a relatively more affordable place to buy a home than neighbouring boroughs.
He said: “The details published by the ONS are interesting.
“The cost ratio of 7.3 times annual earnings to purchase a property in Bury is less than a number of our neighbouring towns, and is 1.0 times less than the national average ratio.
“In fact, in comparison to figures in 2022, this ratio has fallen by 0.5 in Bury.
“This may suggest that although times are hard, and it can be a struggle to purchase a property in Bury, in comparison to other parts of our country, a purchase is perhaps just a little bit more affordable and hopefully achievable for those who wish to buy.”
The data shows that homebuyers in Bury can expect to pay a higher proportion of their wages on a new home in comparison to nearby Bolton, in which those in full-time work could expect to spend six times their annual salary.
However, Trafford was revealed to be the worst for housing affordability in the North West, as buyers could expect to spend 10 times their annual salary on purchasing a home.
Mr Cardwell added that some of the cost burden of purchasing a home was softened by the help of a double income.
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He added: “ It has to be remembered that in a significant number of property purchases in Bury, two or more people purchase a property together, and that of course makes a property purchase more affordable, and lessons the impact of these ratios.
“Certainly in the majority of properties that we sell in Bury there are more than one buyer.
“As we progress through 2024 it is hoped that the Bank of England will start to lower interest rates, which will in turn then reduce the cost of borrowing for a mortgage and hopefully make a property purchase in Bury even more affordable for many people.”
Housing affordability improved in three-quarters (75%) of local authorities across England and Wales in 2023, compared with the previous year, according to the Office for National Statistics (ONS).
Affordability worsened in just under a quarter (24%) of local authorities and remained the same in 1%, the ONS said.
Average house prices increased in just over two-thirds (69%) of areas compared with 2022 – but average earnings increased in a bigger proportion of areas, at 88%.
Kensington and Chelsea in London was the least affordable area last year, with an average house price-to-earnings ratio of 34.3.
The most affordable was Burnley in Lancashire, with an average house price-to-earnings ratio of 3.7.
In 2023, 7% of areas typically had homes selling for less than five times the average earnings of workers. This was an improvement compared with 2022; however, in 1997, 88% of areas had this ratio.
The report said: “Therefore, affordability remains considerably worse than at the start of the series.”
Looking at England, in the 12 months to September 2023, the average home sold for £290,000, while average full-time earnings were £35,100.
This means that, in England, full-time employees could expect to spend 8.3 times their earnings on purchasing a home in their local authority area.
This represents an overall improvement in affordability compared with 2022, when the average home in England cost around 8.5 times the average wage.
Since 2022, housing affordability at a local level:
▪️ improved in 75% of local authority districts in England & Wales▪️ worsened in 24%▪️ stayed the same in 1%
Use our interactive map and explore housing affordability over time in your area.➡️ https://t.co/QsKhq5hKcF pic.twitter.com/j6Hlx11tWv
— Office for National Statistics (ONS) (@ONS) March 25, 2024
In Wales, the average home sold for £196,500 in the 12 months to September, while the average workplace-based full-time wage was £32,400.
This gave an affordability ratio of 6.1, down from 6.4 in 2022.
House sales prices have become more affordable since 2021, but remain in line with pre-coronavirus pandemic trends, the ONS said.
The affordability ratio doubled in England from the start of the records in 1997 to 2007.
In 1997, a home in England was worth around three-and-a-half times the average wage, but by 2007 buyers faced paying just over seven times their salary typically to buy a home.
In Wales, affordability ratios doubled from 1997 to 2005 and peaked at 6.6 in 2007. Since then, they have remained between 5.5 and 6.5, with a less pronounced increase and decrease in the past three years than in England, the ONS said.
Mortgage rates have jumped amid increases in the Bank of England base rate, meaning that some existing homeowners could have a payment shock when their deal expires.
Recent signs that inflation is cooling have raised expectations around the potential for the Bank of England to start cutting the base rate in the months ahead.
Average private rents rose at their fastest annual pace last month since comparable records began in 2015, according to official UK figures.
The data from the Office for National Statistics (ONS) showed no let up in the surging costs faced by renters since 2022.
It reported a leap of 9% over the 12 months to February in a provisional estimate, up from the 8.5% annual rate seen in January.
The ONS said average UK house prices decreased 0.6% in the 12 months to January, to £282,000, noting an easing in the pace of decline.
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More recent industry data has suggested a return to price growth as mortgage rates have come down in anticipation of Bank of England interest rate cuts.
The upwards pressure on rents has come from demand hugely outstripping supply and landlords passing on to tenants the higher interest rates they are facing.
ONS deputy director for prices, Matt Corder, said: “Brent saw the highest annual rental growth of all local areas and Melton saw the lowest, while rental prices were highest in Kensington & Chelsea and lowest in Dumfries & Galloway.
“Average UK house prices continued to fall, albeit at a slower annual rate than seen recently.
“Indeed, Scotland’s average house prices rose at their fastest annual rate for more than a year.”
At a rate of 9%, the pace of rent increases is hugely outstripping inflation.
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Separate ONS data on Wednesday showed a slowing in the annual headline measure from 4% in January to 3.4% last month.
However, the prospects for Bank of England interest rate cuts still seem to be months away, as the figures will not have erased concerns among rate-setters about inflationary pressures ahead.
Hannah Bashford, director of model financial solutions, said of the ONS figures: “As shocking as this data is, it’s not a surprise as we have seen many landlords having to raise their rents to cover the increased interest costs and satisfy lenders’ affordability criteria.
“The rental market is broken and those that do not have mortgages are reaping the benefits of these hikes, while others are just about clinging onto their investments.
“These rents make it almost impossible to save for a deposit and so the circle continues.”
The average UK house price was £6,000 ($7,612) lower in November last year, falling at the fastest pace in over a decade.
Property values fell by 2.1% over the 12 months to November to reach £285,000 on average, according to the Office for National Statistics (ONS), the biggest drop since 2011.
London was the region with the biggest annual decrease, with prices in the capital falling 6%.
House prices typically fell across the year in England and Wales, but increased in Scotland and Northern Ireland.
Average house prices over the 12 months to November 2023 fell 2.9% in England to £302,000 and dropped 2.4% in Wales to £213,000.
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The typical property value increased in Scotland to £194,000, which represents a 2.2% annual rise.
Average house prices increased by 2.1% annually in Northern Ireland to £180,000.
Within England, the North East recorded a 0.4% drop, the smallest decrease in average house prices in the 12 months to November.
According to an estate agent boss, house hunters are putting their property searches on ice while they wait to see if they can get a cheaper mortgage deal
Nick Leeming, chairman of Jackson-Stops, said: “The figures published today suggest a frosty end to the year with buyers putting their searches on hold in order to see how mortgage rates would react as inflation fell once again. 2023 was defined by mortgage affordability pressures and a shift from immense competition, towards a smaller, more committed buyer pool.”
Aimee North, head of housing market indices at the ONS, said: “The annual fall in house prices continues to accelerate, with the average cost of a home falling at its fastest rate for over 12 years.
“Meanwhile annual rent increases remain at record levels across the country.”
Private rental prices paid by tenants in the UK rose by 6.2% in the 12 months to December 2023.
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Wales that saw the biggest annual increase in rents, with prices rising 7.1% over the year to December, down only slightly from the 7.3% rise in rents in the year to November. In Scotland, rents rose 6.2% over 2023 and England registered a 6.1% increase.
Private rental prices in London increased by 6.8% in the year to December 2023, down slightly from a record-high rise of 6.9% in the 12 months to November 2023.
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