Housing affordability in England and Wales has returned to similar levels seen before the coronavirus pandemic, helped by wages rising faster than property values, according to the Office for National Statistics (ONS).

But despite the improvements, property prices are still considered affordable in less than one in 10 local authority areas.

A sharp worsening in affordability had been seen in the early 2020s, as the financial impacts of the coronavirus were felt by households.

Last year, the median average home in England cost around 7.7 times average full-time employee earnings, at £290,000 versus £37,600.

This was a decrease from a house price-to-earnings ratio of 8.4, recorded in 2023 – and therefore marked an improvement in housing affordability.

In Wales, the average home cost £201,000 last year, equating to 5.9 times annual earnings, at £34,300.

This also marked an improvement in affordability, from a ratio of 6.2 recorded in 2023.

Back in 2021, the average home in England cost around 9.1 times the average wage, and in Wales the ratio was 6.6.

In 2019, before the coronavirus pandemic, the ratio was 7.9 for England and 5.8 for Wales.

The ONS said median house sales prices have increased by 1% since 2021.

At the same time, average earnings rose a much faster rate, by 20%.

Despite strong wage growth, in 2024, just 9% of local authorities had homes bought for less than five times workers’ earnings on average.

This is the level that is deemed to be “affordable”.

This was an improvement compared with 2023, when 6% of areas were deemed affordable, and marked highest proportion since 2015.

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But it is still well below levels seen when records started, in 1997.

At this time, 88% of areas were deemed affordable.

Housing affordability has improved in 91% of local authorities in England and Wales and worsened in 9% since 2023, the report found.

The most affordable local authorities in 2024 were Blaenau Gwent in Wales with an average house price-to-earnings ratio of 3.8, Burnley in North West England with a ratio of 3.9 and Blackpool, also with a ratio of 3.9.

Kensington and Chelsea in London was identified as the least affordable area, with homes there typically priced at 27.1 times average earnings.

There has been some improvement in affordability in Kensington and Chelsea though, with the ratio being down from a peak of 44.0 in 2018 and falling from 33.4 in 2023.

The ONS also highlighted a particularly steep worsening in affordability in Staffordshire Moorlands in the West Midlands during the five years to 2024, with the ratio increasing from 5.8 in 2019 to 7.3 in 2024.

Sarah Coles, head of personal finance, Hargreaves Lansdown said: “Wages have risen faster than house prices in recent years, so would-be buyers are inching slightly closer to being able to afford a home of their own.

House prices are up 1% since 2021 and wages are up 20%.

“However, last year the average home in England still cost 7.7 times the average wage, so it’s still an incredible stretch – especially given stubbornly high interest rates.

“Housing is considered affordable when it costs five times earnings, and still fewer than one in 10 areas have reached this level.”

Ms Coles continued: “If you’re planning to buy, the best protection from being overstretched is to build as big a deposit as you can manage.

“It’s worth getting all the help you can from wherever it’s available – whether that’s from the bank of mum and dad, or by saving into a Lifetime Isa and getting a 25% bonus of up to £1,000 a year from the Government.

“Nothing will make buying a property a doddle, but the less you have to borrow to get you there, the less vulnerable you will be.”

From April, stamp duty discounts are set to become less generous for some home buyers, with “nil rate” bands shrinking.

Stamp duty applies in England and Northern Ireland.