Special Report

• Home improvements that add floor area, such as an extension or loft conversion, can add up to 25% to a property’s value
• Extending to accommodate an extra bedroom can add nearly 15% to the value of the house
• Extra bathroom adds 6% to value of the average home

• Higher mortgage rates have resulted in a significant increase in the cost of servicing a mortgage relative to take-home pay
• High house prices relative to average earnings continue to make raising a deposit a significant barrier for first time buyers (FTBs)
• Affordability remains most stretched in London and south of England; the North & Scotland remain the most affordable regions

• 25% premium for a property situated within a National Park
• 7% premium for a property within 5km of a National Park
• 13% premium for a property located in Area of Outstanding Natural Beauty (AONB)

• House prices in predominantly rural areas have risen by 29% over last five years, compared to 18% in predominately urban areas
• Rural detached properties have seen strongest rates of price growth, urban flats the weakest
• 13 of the top 20 local authorities for house price growth in 2021 classed as rural

• London borough of Kensington and Chelsea least affordable; East Ayrshire in Scotland remains most affordable
• North East has smallest gap between least and most affordable boroughs, London has largest
• 25% of local authorities have seen an improvement in affordability since 2016
• Westminster, Cambridge, Reading and Aberdeen amongst areas which have seen largest improvements, due to earnings growth outpacing house price growth
• Around 45% of local authorities now have an HPER of 6+, compared with c35% in 2016

• High house prices relative to average earnings continue to make raising a deposit a significant barrier for first time buyers (FTBs)
• 20% deposit equivalent to 110% average income – a record high and up from 102% one year ago
• House prices have risen quicker than earnings over last year resulting in increase in cost of servicing a mortgage relative to take-home pay
• North region & Scotland remain most affordable

• 1.7% house price premium for an owner occupier property rated A or B compared to a D-rated home
• Properties rated F or G attract a 3.5% discount compared to a similar D-rated property

• £46,800 premium in London for property 500m from nearest station, compared with a similar property 1,500m (1.5km) away
• Slight increase in London premium to 9.7% from 8.6% in 2019/20
• £11,400 in Glasgow and £11,000 premium in Greater Manchester on comparable basis
• Glasgow sees biggest increase in premium (7.2% up from 3.5% in 2019/20)
• Manchester premium falls to 6.1% (from 9.0% in 2019/20)

Nationwide's recent Affordability Report identified there had been a significant widening in the gap between the least affordable and most affordable regions. However, there is also considerable variation within regions and this report explores this further.

• High house prices relative to average earnings continue to make raising a deposit a significant barrier for first time buyers (FTBs)
• 20% deposit equivalent to 104% average income
• But low mortgage rates mean the cost of servicing a mortgage as a share of take-home pay is close to the historic average
• Significant variation by region and occupation
• North & Scotland remain most affordable regions

• 20% premium for a property situated within a National Park
• 6% premium for a property within 5km of a National Park

• House prices up 33% in 10s vs 180% in 80s
• London top performer in 2010s with house prices rising twice as fast as UK average
• Low interest rates have helped support affordability through the decade
• High house price to earnings ratio make deposit a major barrier for first time buyers