Housing affordability has improved but with average mortgage interest rases rising a percentage point over the course of the year, property market activity is down 9% compared with 12 months ago according to property website Zoopla.
The online portal said its latest analysis shows the proportion of two and three-bed houses that are “affordable” has increased from 45% in 2025 to 51% in 2026.
A household on an average combined income of £53,500 can now afford a home listed at up to £301,000, assuming a mortgage of 4.5 times their gross annual income and a 20% deposit.
Commenting on the figures Richard Donnell, Executive Director at Zoopla, said affordability had improved as a result of incomes continue to rise faster than house prices: “However”, he added”, the impact is being offset by higher mortgage rates which are adding to the monthly costs of taking out a new mortgage.”
Affordability varies by region. The biggest improvements over the last 12 months have been in southern and eastern regions where income growth, more homes listed for sale, and flat to falling house prices have brought more properties within reach of buyers said Zoopla. The south west has recorded the greatest improvement for buyers, with the proportion of houses that are affordable rising by 10% to 47%, followed by the east of England (9%). Northern regions have seen smaller increases, largely because a greater proportion of houses were already more affordable.
In the South East, 23% cent of two and three-bed houses fall under the affordability threshold, while the average asking price stands at £375,000. London remains the least affordable market by a considerable margin, with fewer than 100 two and three-bed houses priced below £301,000: “The extra cost for buyers is greater in southern regions where house prices are higher and this affordability divide is seen across the country. More than two thirds of houses in northern England and Scotland are now affordable to the average household while this drops to less than a fifth in London and South East England” said Donnell.
Table 1: Availability of two and three-bed houses that are affordable by region
| Region | Affordable houses (nearest 100) | Share 2026 | Share 2025 | Change (percentage points) | Average asking price |
| North East | 4,300 | 83% | 82% | +1.6 | £155,000 |
| Scotland | 3,300 | 80% | 76% | +3.6 | £207,500 |
| Yorkshire and The Humber | 10,400 | 76% | 71% | +5.4 | £210,000 |
| East Midlands | 12,600 | 74% | 66% | +7.9 | £227,500 |
| Wales | 7,400 | 72% | 66% | +6.2 | £219,500 |
| North West | 10,300 | 71% | 67% | +4.5 | £217,500 |
| West Midlands | 9,800 | 64% | 57% | +7.1 | £245,000 |
| South West | 10,500 | 47% | 38% | +9.8 | £290,000 |
| East of England | 8,500 | 39% | 30% | +9.2 | £317,500 |
| South East | 7,100 | 23% | 16% | +7.7 | £375,000 |
| London | <100 | 0.5% | 0.4% | +0.1 | £542,500 |
| Great Britain | 84,300 | 51% | 45% | +5.7 | £293,200 |
Source: Zoopla 2026
