Income alone doesn’t tell you where property is genuinely affordable, what matters is how far that income actually stretches against local property prices. Here’s what current ONS earnings data shows about regional pay, and where that income goes furthest for buyers and investors.
The National Picture
According to the latest ONS earnings data, median annual pay across the UK for all employees currently stands at £32,890, with full-time workers earning a median of £39,039. Regional pay differences remain substantial: London has the highest median annual earnings in the country at £39,778, while the North East sits at the other end of the scale at £29,584 – a gap of around 25% between the highest and lowest-paid regions.
Why Higher Salaries Don’t Automatically Mean Better Value
On the surface, London’s significantly higher average salary looks like an advantage for buyers. In practice, the opposite is often true once property prices are factored in. London’s average property prices run several times higher than the national average, meaning the ratio between income and property price, a key measure of genuine affordability, is considerably worse in London than in most other UK regions, despite the higher headline salary.
Where the Income-to-Property-Price Ratio Works Best for Buyers
The regions offering the strongest combination of reasonable income and considerably lower property prices tend to be concentrated in the north of England and parts of Scotland. The North East, despite recording the lowest average salary nationally, also has some of the lowest average property prices in the UK, and previous research into first-time buyer affordability has consistently placed areas in Yorkshire, the North West, and Scotland, including East Ayrshire and Kilmarnock, among the most genuinely affordable places to buy relative to local income. The North of England as a whole has also shown some of the smallest gaps between its cheapest and most expensive local areas, in contrast to London and the South East, where the spread between affordable and unaffordable pockets is far wider.
What This Means for Investors, Not Just Homebuyers
For property investors specifically, the relationship between local income and property price matters beyond simple affordability, it directly affects rental yield potential too. Areas where property prices are low relative to local incomes tend to support the kind of rent-to-price ratio that drives strong yields, which is part of why cities including Sunderland, Newcastle, and Leeds have consistently ranked among the UK’s strongest performers for rental yield, alongside their comparatively affordable purchase prices relative to local wages.
The South East and East of England: A Middle Ground
Some regions occupy a middle position worth noting. The South East and parts of the East of England report above-average salaries, benefiting from proximity to London and access to well-paid roles without the full cost of living in the capital itself. Property prices in these areas remain considerably higher than the north of England, but the combination of strong local pay and slightly more moderate pricing than London itself makes these regions a reasonable middle ground for buyers unwilling to move further from the capital.
A Word of Caution on Using Income Alone
Income-to-price ratios are a useful lens, but they’re not the only factor worth weighing. Areas with the strongest ratios on paper don’t always have the strongest long-term capital growth prospects or the most resilient long-term tenant demand, and it’s worth balancing affordability data against local economic drivers, employment, infrastructure investment, and population trends, rather than relying on income and price data alone.
The Bottom Line
London’s higher average salary doesn’t translate into better property affordability once local prices are accounted for, if anything, the opposite is generally true. The strongest combination of earning potential and property value for both buyers and investors currently sits in parts of the north of England and Scotland, where the gap between local income and property prices remains considerably narrower than in London and much of the South East.