Top 10 most affordable UK cities: house price rises continue to outpace earnings growth — here's where to head for the best value

Housing affordability in UK cities is at its lowest level for 12 years as price growth continues to outpace annual wage increases, according to new figures.

A report by Lloyds Bank also reveals homebuyers need to head to Scotland and Northern Ireland to find the cities with the best house price to earnings ratios.

The urban population is growing faster and faster, with two out of every three people expected to be living in cities by 2050.

This increased demand for homes is inevitably pushing house prices in these areas up — the average UK city house price is now £248,000, an increase of 37 per cent over five years — but average earnings haven't kept up, increasing by just 11 per cent to £34,000 over the same period.

Seven cities across the UK are now reporting average house prices of more than 10 times the average earnings for the local urban area, with Oxford declared the least affordable.

A prime choice for buyers leaving London, Oxford has average house prices of £460,000, 12 times the city's average wage.

“Buying a home in UK cities remains challenging, as average house prices are outpacing wage growth," said Andrew Mason, Lloyds Bank mortgage products director.

"However the market has seen the number of first-time buyers at a high and home owners are still attracted to cities across the UK, in spite of rising costs."

Greater London is the fifth least affordable UK city, with average house prices of £503,000 now 10.3 times the average earnings of £48,604.

Surprisingly, the Lloyds figures found Greater London no longer has the highest average house price of all UK cities.

Winchester in Hampshire has seen house prices increase by 93 per cent to £541,891 over the past 10 years, while house prices in the Hertfordshire town of St Albans are also higher than London's at £521,116.

Homebuyers should head north for affordability, as all of the most affordable UK cities are revealed to be outside of southern England.

Derry-Londonderry in Northern Ireland and Stirling in Scotland are joint first on the list, with house prices 4.4 times average local earnings.

Derry-Londonderry, where the average house price is £137,400, has seen its popularity go from strength to strength since it was crowned first ever UK City of Culture in 2013. The city's tourist infrastructure got a huge makeover to cope with these new visitors and developments have been ongoing.

Stirling, in central Scotland, is famous for its medieval old town and former royal residence Stirling Castle, and has topped the list of most affordable UK cities for six consecutive years.

England's most affordable city, Bradford in Yorkshire, came fourth in the UK with average house prices of £139,712. This is 4.6 times earnings a better ratio than that of York, just an hour away, where prices are eight times the average annual wage.

New to the list this year are Newry, also in Northern Ireland; Aberdeen and Perth in Scotland; and Hereford in the West Midlands.

Dundee, Durham, Swansea —Wales's most affordable city — and Lisburn in Northern Ireland all fell out of the top 10 in 2018.