“New Towns” lead in homebuyer affordability
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by Gill Montia
Housing affordability in “New Towns” across England and Wales is at its most favourable since the financial crisis began in 2007.
New Towns such as Welwyn Garden City and Hatfield were established after World War II and according to Lloyds TSB research, the average price of a home in such a location is £182,354 or 6.1 times gross annual average earnings (£29,794).
The ratio has fallen from 6.3 times over the past year and is below the national average of 6.9, with the improvement having been driven by an increase in average earnings across New Towns (typically 9% in the past five years).
In contrast, house prices in New Towns are broadly unchanged compared with 2007 (+1%).
However, average property values in south eastern New Towns have been resilient since the start of the housing downturn in autumn 2007, with increases in Hatfield (14%), Welwyn Garden City (8%), Harlow and Hemel Hempstead (both 6%).
Outside the south east, only Skelmersdale in Lancashire has recorded any price growth (7%) and prices have fallen in Newtown in Powys (14%) and Corby in Northamptonshire (12%).
Other key findings from the research are as follows:
Hatfield in Hertfordshire is the least affordable New Town in England and Wales with an average house price of £277,239 or over eight times the gross annual average earnings for the area.
Welwyn Garden City, which neighbours Hatfield, is the next least affordable (7.5), followed by Harlow in Essex (7.0) and Crawley and Bracknell in the South East (both 6.7).
Corby in Northamptonshire is the New Town to have the greatest improvement in housing affordability since autumn 2007, the average house price having fallen from 6.2 as a multiple of gross annual average earnings to 4.8 since 2007, following a 12% fall in house prices.
Newtown in Powys (6.7 to 5.3) and Peterborough (6.6 to 5.5) have seen the next largest improvements in affordability.
Peterlee in County Durham is the most affordable New Town with an average house price of £86,427 or 3.2 times gross average annual earnings.
The next most affordable New Towns are Skelmersdale (4.0), Newton Aycliffe (4.5) and Runcorn (4.5).
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