Lloyds analysis indicates that the UK house-price-to-earnings ratio has fallen to 7.3 times average annual earnings, from 7.6, reaching its lowest level in 11 years as wage growth has outpaced house-price inflation. Yet this relative improvement sits alongside higher mortgage pricing, weaker approvals and reports that property sales have slowed as borrowing costs rise.
Advisers should distinguish between purchase-price affordability and monthly-payment affordability. Client conversations should test rate resilience, future remortgage exposure, term choices, deposit sources and the full costs of buying. AI-driven affordability and cash-flow tools may make scenario planning more accessible, but they should support—not replace—proper fact-finding, lender-criteria checks and an assessment of foreseeable changes in a client’s circumstances.