"After years of buyers being squeezed by rapid house price inflation, the tide has finally turned and, with wages now rising faster than property values for several years in a row, affordability is slowly but steadily improving"
- Marc von Grundherr - Benham and Reeves
The UK's house price to income affordability ratio is forecast to fall to 8.2 in 2026, marking the fourth consecutive year of improving affordability for homebuyers, following a peak of 9.5 in 2022, when house price growth significantly outpaced earnings.
The latest research from London estate agent Benham and Reeves has found that sustained wage growth is helping to restore balance to the market. Benham and Reeves analysed the latest figures on average UK house prices and average gross earnings, alongside 2026 forecasts, to understand how improving wage growth is helping to restore balance to the market.
The research shows that so far this year, the average UK home sits at 8.3 times median gross earnings, down from 8.4 in 2024 and continuing the downward trend seen since 2022. Prior to this, the affordability ratio had fallen from 9.5 in 2022 to 8.9 in 2023, highlighting a clear multi-year improvement.
This shift has been driven by the fact that wage growth has exceeded house price inflation every year since 2023.
In 2022, house prices surged by 11.2% while average earnings rose by just 6.9%, placing considerable strain on affordability. Since then, the picture has reversed. In 2023, average earnings climbed by 6.3% while house prices dipped by 1%. In 2024, earnings rose by 7.1% compared to a marginal 0.9% rise in property values.
This year, wage growth of 4.1% is again outpacing the 3% rise in average house prices, and this more balanced pattern is expected to continue into 2026, with earnings forecast to rise by 4.7% against a 2.9% increase in house prices.
This sustained trend of stronger wage growth is helping to gradually restore affordability for buyers who have faced significant pressures in recent years, particularly following the sharp post-pandemic surge in property values.
"After years of buyers being squeezed by rapid house price inflation, the tide has finally turned and, with wages now rising faster than property values for several years in a row, affordability is slowly but steadily improving," said Marc von Grundherr, director of Benham and Reeves (pictured).
"It won't transform the market overnight, but it does mark a meaningful shift after an extended period of financial strain for anyone hoping to get onto or move up the ladder," von Grundherr explained. "As interest rates stabilise and economic confidence improves, this more sustainable balance between earnings and house prices should support a healthier, more stable level of market activity in the years ahead."
