Lloyds study finds Barking and Dagenham cheapest, Kensington most expensive for London homes
A new Lloyds analysis ranks Barking and Dagenham as the most affordable London borough and Kensington and Chelsea as the least affordable, while overall housing affordability in the capital improves.
Lloyds’ latest affordability analysis identifies Barking and Dagenham as London’s most budget-friendly borough, with an average property price of £322,675, or 6.2 times the average local salary. At the opposite end, the Royal Borough of Kensington and Chelsea tops the list of least affordable areas, where homes average £895,893, equivalent to 17.3 times earnings. The capital’s overall affordability ratio dropped to 10.3 times average earnings from 10.9 a year ago, as wage growth outpaced house-price rises.
Across the UK, the price-to-earnings ratio reached its most favourable level since 2015 at 7.3, down from 7.6 the previous year. First-time buyers now face a ratio of 5.9 to one. Andrew Asaam, mortgages director at Lloyds, highlighted that while rising wages help, higher mortgage rates and the need for larger deposits still hinder many prospective buyers, though some mortgage products with lower deposits may offer a path onto the market.
Why it matters
Understanding which London areas are most and least affordable helps buyers and policymakers gauge housing market pressures.
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