House price to earnings ratios

Summary

In 2016, the house price to earnings ratio of 7.72 for England as a whole was higher than the ratios for all of the authorities in the Lancashire-14 area.

Higher ratios tend to indicate less affordable housing, greater demand and difficulty for households to get onto the property ladder. Lower ratios tend to suggest greater affordability but may indicate lower earnings, reduced purchasing power and/or lower demand in an area.

Locally, there are some very wide variations in the ratios that emphasise the large disparities in general affordability across the Lancashire-14 area, ranging from 3.64 to 7.09 times earnings.

Burnley (3.64), Pendle (3.96), Hyndburn (4.32) Blackburn with Darwen (4.51) and Blackpool (4.89) had the lowest house price to earnings ratios of less than 5.

Preston (5.16), Rossendale (5.18), Lancaster (5.36), Wyre (5.66), Chorley (5.78) and South Ribble (5.83) had ratios in excess of 5 times earnings (but less than 6 times earnings). These clustered around the county (5.47) and regional (5.62) ratios.

West Lancashire (6.37) and Fylde (6.92) were the two local authorities that had ratios in excess of 6 times earnings (but less than 7 times earnings).

Ribble Valley (7.09) was the only local authority in the Lancashire-14 area that had a ratio in excess of 7 times earnings, a little below the England figure of 7.72.

For people wishing to enter the housing market, analysis of housing affordability for this market segment can be measured by looking at the ratio of lower-quartile house prices against the lower-quartile earnings by local authority. In 2016, this ratio was 7.16 for England, slightly lower than the overall house price to earnings ratio of 7.72.

In 2016, the ratio of lower-quartile house prices to lower-quartile earnings for Fylde (7.74) was higher than the overall house price to earnings ratio for the same district (6.92). It was also the only local authority in the Lancashire-14 area to have a greater ratio than England (7.16) in 2016. This suggests that Fylde is the hardest place to enter the housing market in the Lancashire-14 area.

Burnley (2.62) had by far the lowest ratio of lower-quartile house prices to lower-quartile earnings in the Lancashire-14 area, followed by Pendle (3.26), Hyndburn (3.88), Blackburn with Darwen (4.22), Rossendale (4.87) and Preston (4.92). These figures suggest that it is easier to enter the housing market in these areas.

Further analysis of the 2016 figures, along with explanations of the calculations involved and the background to the statistics is provided in the full report. The Instant Atlas dashboard linked to in the 'Related websites' box allows easy comparisons of the previous years figures dating back to 2005.

Further analysis

House price to earnings ratios, 2016 (PDF 1.5 MB) 

Page updated July 2017.