The UK is one of the least affordable countries in the world to buy a home, new research shows.
The findings from money.co.uk follow record increases in house prices in the UK over the past two years, attributable to government initiatives including the stamp duty holiday and new mortgage guarantee, as well as the ‘race for space’ which has seen more people looking for bigger properties following the move to working from home.
The World Housing Market Index from money.co.uk scored 40 countries on their housing affordability, annual house price growth and homeownership rates.
Taking into account the average house price per m², average net income and price p/m² to income, the UK is deemed to be the 10th least affordable housing market of those reviewed.
Explaining the findings, money.co.uk said: “Generally speaking, the more people that can afford to buy a home, the better the market. A healthy housing market should have plenty of suitable buyers waiting to snap up available properties, whereas an unhealthy market might have a slower turnover of homes as only a limited number of people can afford to buy.”
Affordability is certainly an issue facing first-time buyers (FTB) in the UK. A typical FTB property is now worth roughly seven times a 30 to 39-year-old’s annual salary, according to research this month from Direct Line Home Insurance.
Where is Housing Most Affordable?
The United States is the world's most affordable housing market, money.co.uk revealed. Despite ranking 16th for cost p/m² with $2,217 (£1,756), an average income of $51,147 (£40,515) makes the US the most affordable country with an affordability ratio of 4.3%.
Japan has the least affordable housing market, with an average price per m² of property, accounting for 23.5% of net income. And at $7,793 (£6,173) Luxembourg has the world's most expensive property prices per m².
Meanwhile, Macedonia has the world’s cheapest cost per m² at just $774, and Romania has the world's highest homeownership rate at 96.1%.
Turkey was the overall winner of the World Housing Index (ranked on a score of 1-100), coming in with a score of 84.8.
The top 10 national housing markets according to money.co.uk's World Housing Index:
- Turkey
- Montenegro
- Czech Republic
- Slovakia
- Australia
- United States
- New Zealand
- Portugal
- Hungary
- Netherlands
