Housing in Watford became more affordable over the last year, new figures show.
Figures from the Office for National Statistics show full-time employees in Watford could expect to spend 12.5 times their annual earnings on purchasing a home in 2023 – down from 13.9 times the year before.
However, the Institute for Public Policy Research said the housing crisis is not only damaging lives but also holding the economy back and called for an increased investment in genuinely affordable homes.
Last year in England, a house cost 8.3 times the average wage, while the ratio stood at 6.1 in Wales – both slightly down from 8.5 and 6.4 respectively.
While this was the second consecutive fall since 2021, these are still higher than before the pandemic in 2019, when buyers spent 7.9 and 5.8 times their annual earnings.
Maya Singer Hobbs, senior research fellow at the IPPR, said: “The housing affordability crisis is damaging lives and holding back the economy. Its root cause is the failure to build enough homes across the country over several decades, including the failure to build enough genuinely affordable homes.”
She added: “To increase housing supply, and ensure homes are more affordable – whether to rent or buy – we need to reform and streamline the planning system, tackle our dysfunctional land market, and increase investment in genuinely affordable homes.”
Overall, housing affordability improved in three-quarters (75 per cent) of local authorities across England and Wales in 2023, worsened in just under a quarter (24 per cent) and remained the same in 1 per cent, the ONS said.
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 Watford were 2.5 per cent more expensive in 2023 than the year before, at an average price of £410,000. In the meantime, wages saw a 14.7 per cent year-to-year increase.
Cara Pacitti, senior economist at the Resolution Foundation, said: “Although house prices have stabilised in line with earnings since the pandemic, this does little to correct for the gap between earnings and house prices that has opened in the past 25 years.
“While earnings have doubled since 1997, house prices have increased four-and-a-half times.
“This means high barriers to homeownership for the UK’s renters, who are fully exposed to a housing market that offers the worst value for money of any advanced economy.
“The next Government needs to step up urgently to address the lack of affordable, good quality properties – including by building more new homes and modernising our existing housing stock.”
A spokesperson for the Department for Levelling Up, Housing and Communities said: “We are committed to creating a fair housing system that works for everyone, including increasing first-time buyer numbers in all regions and boosting availability of new, genuinely affordable housing.
“Over 876,000 households have been helped to purchase a home since spring 2010 through Government backed schemes including Help to Buy and Right to Buy.
“Our long-term plan for housing will go even further to build the homes that local communities want and need, backed by £10 billion to boost supply and £11.5 billion for affordable homes.”
The average Watford home now costs almost £400,000 as house prices rose more than the East of England average in January.
The 1.3 per cent rise from December last year did not reverse the longer-term trend however, which has seen property prices in the area suffer a 4.8 per cent annual decline.
It brought the average Watford house price to £392,913 in the first month of 2024, Land Registry figures show.
Over the month, the picture was similar to that across the East of England, where prices increased 1.2 per cent, and Watford was above the 0.5 per cent rise for the UK as a whole.
Over the last year, the average sale price of property in Watford fell by £20,000 – putting the area 32nd among the East of England’s 45 local authorities with price data for annual growth.
The highest annual growth in the region was in East Cambridgeshire, where property prices increased on average by 9.1 per cent, to £352,000. At the other end of the scale, properties in Ipswich lost 11.3 per cent of their value, giving an average price of £213,000.
First steps on the property ladder
First-time buyers in Watford spent an average of £348,000 on their property – £17,000 less than a year ago, but £43,000 more than in January 2019.
By comparison, former owner-occupiers paid £451,000 on average in January – 29.6 per cent more than first-time buyers.
Property types
Owners of flats saw the biggest rise in property prices in Watford in January – they increased 1.7 per cent, to £283,446 on average. Over the last year, prices dropped by 3.5 per cent.
Among other types of property:
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Detached: up 1.3 per cent monthly; down 5.3 per cent annually; £930,118 average
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Semi-detached: up 1.1 per cent monthly; down 4.8 per cent annually; £528,251 average
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Terraced: up 1.1 per cent monthly; down 5.9 per cent annually; £416,587 average
How do property prices in Watford compare?
Buyers paid 16.8 per cent more than the average price in the East of England (£337,000) in January for a property in Watford. Across the East of England, property prices are higher than those across the UK, where the average cost is £282,000.
The most expensive properties in the East of England were in Three Rivers – £558,000 on average, and 1.4 times the price as in Watford. Three Rivers properties cost 2.7 times the price as homes in Great Yarmouth (£210,000 average), at the other end of the scale.
The highest property prices across the UK were in Kensington and Chelsea, at £1.2 million.
Factfile
Average property price in January:
Annual change to January:
Highest and lowest annual growth in the East of England: