The affordability of housing in such towns is at its most favourable since the financial crisis began in 2007, according to Lloyds TSB.
The average price for a home in a New Town of £182,354 stands at 6.1 times gross annual average earnings (£29,794). This represents a fall from 6.3 times over the past year and is below the national average of 6.9.
The improvement in affordability over the past five years has been driven by an increase in average earnings, which across New Towns has risen by an average of 9%. In contrast, house prices in New Towns are, on average, broadly unchanged (+1%) compared with 2007.
Average property values in the south eastern New Towns have been particularly resilient since the start of the housing downturn in autumn 2007. There have been increases in Hatfield (14%), Welwyn Garden City (8%), Harlow and Hemel Hempstead (both 6%). Outside the south east, however, only Skelmersdale in Lancashire has recorded any price growth (7%). At the other end of the spectrum, prices have fallen in Newtown in Powys (14%) and Corby in Northamptonshire (12%).
In addition to the recent improvement, affordability in New Towns is also favourable in comparison to the average for England & Wales as a whole. On average, the house price to earnings ratio across the country stands at 6.9. The more favourable affordability situation in New Towns is largely because house prices in these towns are, on average, a fifth (21%) lower than the national average (£230,325[iii]).
Suren Thiru, housing economist at Lloyds TSB, commented:
"Many New Towns are within easy commuting distance of major commercial centres, where housing is typically more expensive. This is particularly striking for New Towns in the south east, where the average property price is close to half, on average, compared to that in London.
"The combination of strong earnings growth and lower priced property, together with good accessibility to the capital, has helped to support prices in many New Towns in the south east during the economic and financial downturn. In addition, populations in many New Towns in the south east have increased since 2007, which is likely to have added to housing demand."
