The headline may come as a surprise.
On 26 March, 2026, the Office for National Statistics (ONS) released its Housing Affordability in England and Wales: 2025 report, and several outlets – not least the venerable Financial Times – led with that sort of apparently upbeat headline: property is at its most affordable since 2015.
Homeownership sometimes feels like a goal balanced on the edge of an ever-receding horizon, so this probably comes as genuinely good, if possibly surprising, news for many people.
But as is so often the case, the headline tells only part of the story, and there is nuance in the numbers. Dig into those, and a more complicated picture emerges – one that deserves a closer look before we declare the housing crisis solved.
The method behind the maths
The ONS measures housing affordability using a ratio: the median average property price divided by the median annual earnings of full-time workers.
In 2025, the median sale price for a home in England stood at £300,000, against median annual earnings of £39,300. This gives an affordability ratio of 7.6 – i.e. the median property value was 7.6 times greater than the median annual full-time income.
And it is this figure that is down – down from 7.8 in 2024, and the lowest it has been since 2015.
Falling property prices is not the cause. In fact, median property values have risen around 5% since 2021 alone. What has brought affordability closer is wages: median earnings have grown by 25% over the same period, closing the gap between income and property prices.
In simple terms, this represents genuine progress. At the peak of 2021, the property value-to-income ratio in England hit levels that risked locking out a generation. The direction of travel has meaningfully reversed from that point.
And some parts of the country are again now back below the ONS's own affordability threshold of ‘five times earnings’. Hyndburn in Lancashire and Kingston upon Hull both came in at a ratio of 4.1 in 2025 – and therefore technically "affordable" by this measure. The North East as a whole sits at 5.0 times.
Nationally speaking, the numbers might lead us towards cautious optimism. The ONS itself notes that the number of local authority areas with a ratio above 12 – the most acutely unaffordable tier – has more than halved since 2021, when it stood at 76 areas (it is now at 33). Oxford has famously sat there in recent years – at one point broadcast in the press as being the most unaffordable city in the UK, when it hit
17 times average incomes, although research shows it was more likely at 15 times. Still, very high.
Not the highest of all areas, though. For context, Kensington and Chelsea, as part of Greater London, remains the outlier nationally, with property values at 25.2 times local average incomes. Even that is down sharply from a peak of 44 times income reported by outlets there in 2018, however.
Structurally speaking, we might look at all this with a sense of growing relief, seeing that the worst of the distortion is easing.
Why, then, this sense of doubt you can no doubt feel creeping through my narrative today?
Let’s explore a little further.
There is more to affordability than price-to-income ratios
The ONS headline from 26 March 2026 tells us something about the state of the market – but it soon starts to fray at the edges, if not unravel completely, when you start to pick at it.
Why? Because the ONS ratio compares house prices to gross earnings. What it does not – and truthfully, cannot – account for is what has happened to the actual cost of buying and owning a home in the intervening years, particularly in the face of general costs of living.
Consider mortgage rates.
In 2021, when the affordability ratio was stretched to its widest point, the average two-year fixed mortgage rate in the UK sat at around 2.5%. By late 2023, it had surged above 6%. This has been largely attributed to the fallout from the mini-budget under Truss/Kwarteng, but there were other structural pressures at the time.
Those rates, soaring as they did as the Bank of England base rate chased inflation upwards, had a stifling effect on property price rises, but at the same time, they brought obvious challenges for households when it came to disposable income.
These rates have come down since, increasingly so through the last few months, and as we entered 2026, all the talk had been of the Bank of England base rate likely to fall further throughout the year, bringing mortgage rates down accordingly.
Recent events have changed this narrative, and as is well documented, we have witnessed average mortgage rates climb.
A buyer purchasing a £300,000 home today with a 10% deposit, on a 25-year repayment mortgage at 4.5%, now faces monthly repayments in the region of £1,500. The same purchase at 2020's rates would have cost closer to £1,100 a month. And of course, at the moment, mortgage products are changing quite quickly, with those rates now heading up to an average of more like 5% or a little over.
What does this mean in practice? It means that whilst the affordability ratio may be falling, the actual monthly outgoing is not, and whilst wages have risen in the meantime, we have to recognise that other costs of living have also increased.
This is the problem posed by taking the ONS affordability methodology in isolation. It is useful, and it can be headline-grabbing, but it does not model what a buyer actually feels in their back pocket, nor what they pay each month to service debt.
An improving affordability ratio in an environment of structurally higher rates can and often will be misleading. The gap between salary and house prices may have narrowed, but the gap between salary and the cost of living more broadly has kept pace or widened.
Inflation, even having retreated from its 2022 peak, has permanently repriced a wide basket of everyday goods and services. Groceries, energy, insurance and childcare have all risen substantially faster than wages at various points in the last four years. The 25% earnings growth that the ONS credits with improving affordability ratios has, for many households, been absorbed by higher day-to-day costs.
In short, real disposable income tells a less flattering story than gross median wages.
There is also a broader geopolitical context that the data, collected in 2025, is only just beginning to reflect. Conflict in the Middle East and continued war in Ukraine, is causing geopolitical tension and uncertainty, energy price volatility and problems with international trade that impact us all. The recalibration of global supply chains continues to create headwinds that impact the economy, and naturally this feeds through to impact consumer confidence.
Which prompts an obvious question: how is consumer confidence here in Oxford?
Measured optimism for the Oxford property market
Despite all of the above – the affordability pressures, rising mortgage rates, interest rate predictions heading into reverse, and an expectation for potentially rocky weeks ahead – none of this is to say that the market is stagnant or that buyers should sit on their hands.
In fact, quite the opposite. Several data points suggest that activity and sentiment are holding up better than the outward noise would suggest.
HMRC transaction figures showed a 6% uplift in residential property sales between January and February of this year, a meaningful step-up in activity at a time of year when the market is traditionally finding its feet, and indeed a bigger jump than in other recent years.
Numbers of new instructions – that is to say, properties being newly listed for sale – have increased significantly over the first quarter of the year in 2026, with 1,684 properties currently for sale in Oxford, up from 1,469 in December, and 16% higher than at the same time last year (per Dataloft figures).
It all suggests that sellers are sufficiently keen to commit, in a way that wasn’t matched through much of last year and 2024.
Supply is high and demand is increasing. As we head into the Easter period, traditionally a time of year that sets off a busier period for the property market, this is a healthy signal.
Mortgage rates have edged upwards in recent weeks, as mentioned, but so far this has not materially dampened activity. Lender appetite remains strong, and the product landscape has diversified considerably. Back in 2023, it looked like thin pickings by comparison. So, whilst the mortgage market is not quite as attractive as it might have been four or five weeks ago, the well is definitely not dry by historic measures.
At ground level, sentiment is, by and large, positive. A little cautious maybe, and with half an eye on news headlines, but overall there seems to be a sense out there amongst local Oxford people that, until there is a reason not to, they should continue to move home – just as they should continue to go to work, go shopping and go on holiday.
The picture, in short, is one of a market that is functioning, adjusting, and in some respects even improving – but to us as local Oxford estate agents, we feel it is important to recognise that the improvement is more nuanced than the ONS headlines alone convey.
Our job as Oxford estate agents is to successfully navigate the home moving process for our buyers and sellers – and this is why it is so crucial to be honest about the state of the market, and to keep a watch on it as things change or, equally, settle down, which we can still hope will happen within the next few weeks.
What is happening in the local Oxford Property Market
Payscale, a leading market intelligence group specialising in income data, puts Oxford’s average income at £39,000 – not very far away from the £39,300 national average income noted by the ONS.
At the same time, the average property value stands at approximately £478,595 according to Dataloft analysis – well over 50% higher than the national average of £300,000 noted by the ONS.
It produces an affordability ratio of over 12.2 times income.
An improvement on 15 times, as recorded in previous years! But nevertheless, higher than the 7.6 national average, and still enough to place Oxford as one of the 33 districts deemed most unaffordable in the country.
In a tightening market, this matters. Local buyers are likely to feel mortgage rate changes more keenly as the general cost of living impacts people locally more so than other parts, especially when house prices are so much further ahead than national averages at the same time.
It means that local buyers have a little more to consider when deciding how much to budget each month for things like mortgages, deposit savings, and other expenses.
That said, all this does not mean the market is weakening at this stage. In fact, activity levels have held up well. Transaction figures have risen in early 2026, more properties are coming to market, and buyer demand remains steady. The market is functioning – but buyers in the market right now are also becoming more selective.
This is particularly important for sellers to take on board – and especially when setting asking prices. With local affordability stretched in real terms, properties priced too ambitiously are more likely to stagnate.
Buyers remain active, right now, and we are working with plenty at the moment who are ready to purchase and eager to come out viewing; that does not mean that they aren’t also cautious and price-conscious.
The encouraging news is that well-priced homes are still achieving strong results, often within reasonable timeframes – with time on market dropping in the first three months of 2026, from 61 days on the market in December 2025, to 47 days on market by March 2026.
The local market remains fundamentally strong – but when it comes to getting your home sold, in tighter, less certain markets, strategy matters.
If you’re considering moving in 2026, understanding these nuances is key. The headlines suggest improving affordability, but the reality is more complex. That doesn’t mean being defeatist – but recognising the shape of things allows us to build the right strategy for our clients when selling their homes. Navigating the complexity of the market is where local expertise becomes invaluable.
If you’d like to discuss what these trends mean for your property, we’d be delighted to help. Contact us here at Cherry Picked Residential in Oxford, for an honest but pragmatic discussion about getting you moved successfully in 2026.
