As the famous estate agent saying goes, the most important factors when it comes to buying a house are 'location, location, location' - but where is most affordable?

The Office for National Statistics (ONS) compared average house prices to average earnings across the UK to work out an 'affordability ratio' for people living in an area.

Anywhere with a ratio above five - ie house price is more than five times income - was deemed 'unaffordable', given mortgages are normally offered up to that level.

The average London home was found to be unaffordable for most households based on income, as the typical price hit £562,000. This is because an average property in London was not affordable for any household income decile - ie tenth of population.

The average house price in London in July was unchanged since June but up 0.7 per cent since July 2024 - compared to a UK-wide annual rise of 2.8 per cent.

All parts of London had an affordability ratio of at least 12, apart from Tower Hamlets at 9.4. The highest was Kensington and Chelsea at 35.5, then Westminster at 24.4.

Even for those in London in the top income decile - defined by the ONS as the 90th percentile of income - the figure is 5.8, making an average house still unaffordable.

A 'decile' is a mathematical term to represent a tenth of a population size, and was used in the report to split up the country into ten groups to explain affordability.

Each decile was plotted on a graph as a percentile boundary - such as the top percentile being 90th. There will therefore be people in London on incomes above this, for example 91st or 92nd, where property will eventually become 'affordable'.

MAP - This shows the affordability ratio in your area. This is defined by the average house price to average income. A figure above 5 is deemed 'unaffordable':

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GRAPH - The affordability ratio by region. The least affordable, London, also has the biggest difference in affordability between high and low income households:

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In the regions of the South East, East and South West of England, the average home was only affordable to the top income decile (ie the top 10 per cent).

The North East was the most affordable region, and had average house prices that were affordable for the four highest income deciles (ie the top 40 per cent).

Average house price in July 2025 by region East Midlands: £240,000East of England: £338,000London: £562,000North East: £164,000North West: £213,000South East: £382,000South West: £306,000West Midlands: £248,000Yorkshire and Humber: £206,000Advertisement

An average-priced home in the North East cost the equivalent of 8.5 years of income for a low-income household (20th percentile), but 25 years in London.

The ONS said median affordability ratios stood at 7.9 in England, 5.4 in Wales, 5.3 in Scotland and 4.6 in Northern Ireland for the financial year ending (FYE) 2024.

The median home sold for £290,000 in England for FYE last year, compared with £200,000 in Wales, £185,000 in Scotland and £168,000 in Northern Ireland.

These averages have since gone up in July to £292,000 in England, £209,000 in Wales, and £192,000 in Scotland. In Northern Ireland, it was £185,000.

The ONS said in all four countries, affordability improved overall last year as ratios decreased compared with 2023.

But this did not change a long-term trend of homes generally being unaffordable in each country since 2006.

Incomes in Northern Ireland have risen more quickly than house prices in each of the last five years, resulting in it being the only UK country where homes sold for less than five times average income.

In Wales and Scotland, a median-priced home was affordable for the highest-income 40 per cent of households - compared with the 10 per cent highest in England.

Out of 317 local authority areas in England and Wales, 29 or 9 per cent were affordable to those who worked there last year, the highest since 2004 (17 per cent).

A two-bedroom flat in Tottenham is on for £560,000, around the average London house price

A three-bedroom terraced house in Catford, South East London, is also on sale for £560,000

However this was well below the start of the data series in 1999 at 69 per cent.

Housing market experts have warned affordability pressures are biting households, with annual growth in house and rental prices across the UK now slowing.

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The average UK house price increased by 2.8 per cent to £270,000 in the 12 months to July, slowing from 3.6 per cent in the year to June, according to the ONS.

The ONS also said the average private rent in the UK was £1,348 per month in August - 5.7 per cent, or £73, higher than 12 months earlier. The rise slowed from a 5.9 per cent increase recorded in the 12 months to July.

The average rent in England was £1,403 in August, up 5.8 per cent (£76) from a year earlier. This annual rise was lower than in the 12 months to July 2025 (6.0 per cent) and marks the ninth month in a row of slowing annual inflation, the report said.

In Wales, the average rent in August was £811, up 7.8 per cent (£59) from a year earlier. This annual rise was lower than in the 12 months to July (7.9 per cent).

Housing affordability ratio for average household income and average house prices by country. Since 2020, affordability ratio trends have diverged across the countries of the UK

Affordability ratios in Wales, Scotland and Northern Ireland are similarly distributed, with England showing a wider affordability distribution, for the financial year ending 2024

Affordability in Wales and Northern Ireland is similar across the distribution when comparing the same decile of house price and household income, according to the ONS data release

The average rent for Scotland was £1,002 in August, up 3.5 per cent (£34) from a year earlier.

This annual rise was also slower than in the 12 months to July 2025 (3.6 per cent) and is the lowest annual rise for more than three years, the report said.

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Scotland's annual inflation rate has been generally slowing since a record-high annual rise of 11.7 per cent in August 2023.

The latest figures for Northern Ireland show the average rent there was £860 in June, up 7.2 per cent (£58) from a year earlier. This annual rise was lower than in the 12 months to May 2025 (7.4 per cent).

Northern Ireland's annual inflation rate has been generally slowing since a record high annual rise of 9.9 per cent in April 2024.

The figures were released as separate ONS data showed sticky inflation, with the rate of Consumer Prices Index (CPI) at 3.8 per cent in August, the same as July.

Economists believe overall CPI and food inflation are likely to rise further this year.

Figures from the ONS earlier this week showed a rise in total wage growth including bonuses to 4.7 per cent in the quarter to July, up from 4.6 per cent in the three months to June.

The areas of Britain where most residents can't afford to buy a house