Research from Lloyds TSB shows 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).
Suren Thiru, housing economist at Lloyds TSB, saidd: "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."
Hatfield in Hertfordshire is the least affordable New Town in England and Wales with an average house price of £277,239 which is over eight times the gross annual average earnings for the area. Welwyn Garden City, which neighbours Hatfield, is the next least affordable (7.5); followed by Harlow in Essex (7.0) and Crawley and Bracknell in the South East (both 6.7).
Corby in Northamptonshire is the New Town that has seen the greatest improvement in housing affordability since autumn 2007. The average house price in Corby has fallen from 6.2 as a multiple of gross annual average earnings to 4.8 since 2007. This decline in the house price to earnings ratio has been largely driven by a 12% fall in house prices. Newtown in Powys (6.7 to 5.3) and Peterborough (6.6 to 5.5) have seen the next largest improvements in affordability.
Peterlee in County Durham is the most affordable New Town with an average house price of £86,427 that is 3.2 times gross average annual earnings. The next most affordable New Towns are Skelmersdale (4.0), Newton Aycliffe (4.5) and Runcorn (4.5). Peterlee is the only New Town with an average price below £100,000.
House prices in New Towns have increased more slowly than the national average over the past 10 years. Since 2002, the average house price in a New Town has increased by 74% from £105,000 to £182,000 in 2012. This compares with a 92% rise in England and Wales as a whole.
Two of the three New Towns recording the biggest price gains over the past decade are in Wales. Newtown recorded the largest increase (104%) followed by Cwmbran in Gwent (96%). Corby saw the biggest gain in England (96%).
The smallest house price increase amongst New Towns was in Bracknell with a 50% rise since 2002. Redditch (59%) and Crawley (61%) saw the next smallest price increases.
Only three (out of 22) New Towns have an average house price that is higher than that for their region as a whole. In Northampton, the average house price of £179,494 is 13% higher than the average in the east midlands. Average prices in Warrington (9%) and Hatfield (2%) are also above the regional average.
In contrast, house prices in Peterlee and Basildon are 38% below the average for their regions. Stevenage (26%), Harlow (25%) and Milton Keynes (25%) also have prices significantly below the average in their region.
