Kensington and Chelsea Least Affordable London Area
Research by Lloyds Bank reveals the borough has the second-highest house price-to-earnings ratio in Britain.
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Kensington and Chelsea has been identified as the second least affordable area in Britain for homebuyers, with properties costing 17.3 times the average local earnings. This finding comes from research conducted by Lloyds Bank, which analysed house prices and earnings data from April to June 2026.
London Affordability Improves Marginally
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Nationally, the average house price across Britain is now 7.3 times average earnings, marking the lowest price-to-earnings ratio recorded since 2015. This figure represents a decrease from 7.6 a year prior. Lloyds Bank reported that wage growth has outpaced house price increases over the past year, contributing to this improved affordability. The bank's assessment compared statistics from the second quarter of 2026 with similar periods in previous years, utilising data from its house price index and the Office for National Statistics.
Within London specifically, the house price-to-earnings ratio saw a reduction, falling from 10.9 in the second quarter of 2025 to 10.3 in the second quarter of 2026. Despite this improvement, London and the South East of England remain the least affordable regions in the country.
Areas with Highest Ratios
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Elmbridge in Surrey recorded the highest house price-to-earnings ratio in Britain at 17.4. Kensington and Chelsea in London followed closely with a ratio of 17.3. St Albans in Hertfordshire was identified as the third least affordable local authority, with a ratio of 14.1. Other London boroughs appearing in the top 10 least affordable list include Hammersmith and Fulham, Westminster/City of London, and Richmond upon Thames.
Factors Affecting Affordability
Andrew Asaam, mortgages director at Lloyds, noted that while wage growth has helped narrow the gap between earnings and house prices, affordability remains a challenge for many. He highlighted that rising mortgage rates compared to a year ago and the difficulty of saving for a deposit are significant barriers, particularly for first-time buyers. Mr Asaam suggested that exploring mortgages designed for those with smaller deposits and considering locations with better value, such as parts of Scotland and northern England, could offer more options for buyers.
The research also noted that for first-time buyers specifically, the typical home costs marginally under six times earnings, with a ratio of 5.9. The UK government has introduced initiatives to support first-time buyers in England, including a scheme allowing them to purchase new-build properties with a 2.5% deposit, with the government providing an additional 20% loan towards the cost.
Questions this report answers
+What is the house price-to-earnings ratio in Kensington and Chelsea?
According to Lloyds Bank research, Kensington and Chelsea has a house price-to-earnings ratio of 17.3. This makes it the second least affordable local authority in Britain, with properties costing 17.3 times the average local earnings.
+How has affordability changed across London?
Across London, the house price-to-earnings ratio has fallen from 10.9 in the second quarter of 2025 to 10.3 in the second quarter of 2026. Despite this improvement, London remains one of the least affordable regions in the country.
+What is the national average house price-to-earnings ratio?
The average British home is priced at approximately 7.3 times average earnings, according to Lloyds Bank research. This is the lowest ratio recorded since 2015 and represents an improvement from 7.6 a year earlier.
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