Zoopla identifies 36 UK towns with low house price to earnings ratios

Zoopla identifies 36 UK towns with low house price to earnings ratios

Zoopla has analysed 929 UK towns and found 36 where average house prices are less than twice local household earnings, highlighting affordable areas mainly in Scotland and northern England.

Zoopla’s recent analysis of 929 towns across Britain reveals significant regional variation in housing affordability. The typical home price nationally stands at £299,100, which is 4.3 times the average annual household earnings of £69,600, based on two full-time earners. However, in 36 towns, the average house price is less than twice local household earnings, with the lowest ratio at just 1.15 times earnings.

These more affordable locations are predominantly in Scotland, which accounts for 23 of the 36 towns identified. The North East of England follows with eight towns, the North West with four, and Wales with one. Regions such as the South East and London remain the least affordable, with house prices exceeding five times local earnings.

Zoopla’s findings on affordability and regional disparities

The data shows that Scotland dominates the list of towns where typical home values are under twice local household earnings, reflecting a more accessible housing market in many parts of the country. The North East of England is the most affordable region overall, with homes valued at 2.64 times earnings, followed closely by Scotland at 2.74 times earnings. Yorkshire and the Humber, the North West, and Wales also fall below the national average ratio of 4.3.

At the town level, Shildon in County Durham emerges as the most affordable location in Britain, with a typical home price of £73,600, just 1.15 times the average household earnings of £64,000. Ferryhill and Peterlee, also in County Durham, follow closely with house prices at 1.43 and 1.51 times earnings respectively. These three towns are notable as the only ones among those analysed where typical home prices remain below £100,000.

Other affordable towns include coastal locations in Scotland and Workington in west Cumbria, which ranks eighth nationally with a typical home value of £114,900, or 1.65 times household earnings. In Wales, Ferndale, a former coal mining community, is the most affordable town with a typical home price of £116,200 (1.82 times earnings).

Conversely, the South East region is the second least affordable after London, with typical homes costing £395,700 or 5.33 times local earnings. Dover is the most affordable town in the South East, with house prices at 2.97 times earnings. The South West sees homes valued at 4.87 times earnings, with Bideford in North Devon the most affordable town there, at 3.35 times earnings. London remains the least affordable region, with average house prices at £524,100, 6.11 times household earnings. Even the most affordable London borough, Tower Hamlets, has homes costing nearly five times local earnings.

Implications for landlords and investors

This analysis offers valuable insights for landlords and property investors seeking affordable locations with potential for rental demand. Areas where house prices are lower relative to earnings may present opportunities for buy-to-let investments with more accessible entry costs. The predominance of affordable towns in Scotland and northern England suggests these regions could attract landlords looking for value and stable rental markets.

However, affordability does not automatically translate into strong rental yields or demand. Investors should consider local economic conditions, population trends, and rental market dynamics alongside price-to-earnings ratios. Coastal towns and former industrial areas may have specific challenges, such as fluctuating demand or higher maintenance costs, which require careful assessment.

Furthermore, landlords must remain aware of evolving regulatory requirements affecting the private rented sector, including safety standards, tenancy laws, and licensing obligations. Low-cost investment locations may also have varying local authority licensing schemes and compliance demands that impact operational costs and responsibilities.

Considerations for landlords evaluating affordable locations

Landlords interested in these identified affordable towns should conduct thorough due diligence. This includes reviewing local rental market conditions, tenant demand, and the impact of any local licensing or regulatory frameworks. Understanding the balance between purchase price, rental income potential, and compliance costs is essential for sustainable investment.

Additionally, landlords should monitor ongoing changes in tenancy legislation and housing standards, which can influence profitability and risk. For example, the Renters’ Rights Act and updated safety regulations may affect landlord obligations and tenant relations in these areas. Staying informed about regional economic developments and infrastructure projects can also help anticipate future demand shifts.

Keeping track of compliance and market developments

Given the complexity of managing properties across diverse regions, landlords and letting agents benefit from organised record-keeping and compliance management. Tools that assist with tracking tenancy agreements, safety checks, and communication with tenants can reduce administrative burdens and help ensure adherence to legal requirements.

Supporting landlords with compliance and portfolio management

The Landlord Association (TLA) offers membership resources designed to support landlords and letting agents managing properties in varied locations. Through TLA’s compliance materials and practical guidance, members can stay updated on regulatory changes affecting property standards, tenancy law, and safety obligations. TLA’s new property management platform, ORBIT, currently in BETA testing, aims to help landlords organise portfolios, manage rental documentation, and record key compliance actions. While still in development, ORBIT offers features such as document storage and a property management AI assistant, which can be particularly useful for landlords with properties in multiple towns or regions.

Exploring TLA membership provides access to these resources and support, helping landlords navigate the complexities of managing affordable investment properties while maintaining compliance. Members can also benefit from monitoring local licensing requirements and tenancy procedures relevant to their portfolio locations.

Landlords should consider how these tools and resources might streamline their operations and reduce risks associated with regulatory non-compliance, especially when investing in less familiar or emerging markets.

As the property market evolves, affordable towns identified by Zoopla may attract increased landlord interest. Staying informed about local market conditions and regulatory developments will be crucial for successful investment and management in these areas.

Sources: Landlord Today