HOMES became slightly more affordable in Dorset last year, as average earnings rose faster than house prices, figures reveal.

Each year, the Office for National Statistics calculates housing affordability by comparing the median house price in a local authority area to the median full-time annual income of people who live there.

The higher the ratio is, the less affordable homes are to buy.

The median – the middle number in a series – is used instead of the mean average to ensure the figures are not skewed by extreme highs or lows.

In Dorset, the average house price was £295,000 and the average annual salary £30,534 in 2020.

That meant prospective buyers would need 9.7 times their annual salary to buy a home.

That figure was down slightly from 9.9 a year earlier, as the median wage grew by 5.5% while the cost of a property increased by 3.5%, making homes a fraction more affordable on average.

Affordability ratios varied across the South West last year – in the Cotswolds, house hunters spent 11.1 times their annual earnings on a property on average, while in Plymouth, the ratio was just 6.8.

The ONS said affordability across England and Wales had not changed significantly from the year before, but added that it has worsened overall since 1997.

Back then, the gap between ratios in the most and least affordable areas was just 9.9. By 2020, that had risen more than triple to 33.8.

Polly Neate, chief executive of housing charity Shelter, said homeownership is out of reach for many people, especially those on lower and insecure incomes.

"We haven’t built enough good quality or affordable homes for decades, meaning house prices have sky-rocketed," she said.

"With no way of buying and a chronic shortage of social homes, millions have become trapped in expensive private rentals."

Ms Neate said more "genuinely affordable" homes are needed nationally.

She added: "Unlike the Government’s other unaffordable homeownership schemes, like Help to Buy, social homes are actually pegged to local incomes meaning they are affordable by design.

"The Government must urgently invest in building social housing."

House prices have soared in Dorset since 2003 – the earliest point at which local data is available.

The median cost of a property then was £170,000, with last year's figure 74% higher than that. Over the same period, the median annual salary increased by £10,987, a 56% rise.

A report by the Chartered Institute of Housing says that across the UK as a whole, house prices are more affordable than at their most recent peak in 2007, but less so than compared to 1994.

John Perry, CIH policy advisor, said: "While a range of factors contribute to this, such as changes in incomes, the gap between housing supply and numbers actually needed is fundamental.

"In England, the government target of 300,000 new homes annually has never been met in recent years and within this, it has never delivered sufficient homes at affordable rents.

"This means there is still a crisis of affordability, whether assessed in relation to house prices or wider affordability in terms of rents in the private and social sectors."

A spokesperson for the Ministry of Housing, Communities and Local Government said more than 243,000 homes were delivered last year – the highest number in over 30 years.

They added: "We’re investing over £12 billion in affordable housing over the next five years which will include providing up to 180,000 new homes, with half for affordable and social rent.

“This – as well as First Homes, Shared Ownership, the Help to Buy scheme, and the new mortgage guarantee scheme – will help many more people get the keys to their own home.”