Housing affordability- comparing workplace and resident ratios of affordability

The Office for National Statistics released the annual housing affordability data on March 24th. This compares full-time earnings with house prices.

 

One way of analysing the data is compare the ratio between median house prices and the workplace and resident earnings. Where workplace earnings are lower than resident earnings then people working in the area earn less than residents of the area and vice versa. If we take the area with the highest difference namely Tower Hamlets the figure is 1.28 indicating that those working in the area earn far less than those residing in the area. Waverly in Suffolk had the highest ratio of workplace to resident earnings at 0.72. 

 

Of the 317 Local Authorities, 86 had higher resident than workplace earnings with 18 where both ratios were the same and 213 where the workplace earnings were higher than resident earnings.

 

Is there are pattern to the data?

Areas with higher resident than workplace earnings are more likely to be urban than rural whereas the converse is true of areas where workplace earnings are higher than resident earnings.

 

 

Notes

“Affordability ratios calculated by dividing house prices by gross annual earnings, based on the median and lower quartiles of both house prices and earnings. The earnings data are from the Annual Survey of Hours and Earnings, which provides a snapshot of earnings at April in each year. Earnings relate to gross full-time individual earnings on a place of work basis. The house price statistics come from the House Price Statistics for Small Areas, which report the median and lower quartile price paid for residential property and refer to a 12-month period with April in the middle (year ending September). Statistics are available at country, region, county and local authority district level in England and Wales.

 

House Price Statistics for Small Areas and Annual Survey of Hours and Earnings from the Office for National Statistics."

 

Sources

Office for National Statistics, (24 March 2025), Housing affordability in England and Wales: 2024.