Housing costs as a share of disposable income differ significantly across Europe. The UK exhibits the largest disparities, though it also contains regions with some of the lowest housing costs relative to income.
In recent years, the housing and living crises have impacted Europe deeply. With inflation reaching its highest level in over 40 years in 2022, the effects have been felt unevenly across different regions. Capital cities and larger metropolitan areas bear the brunt of the higher housing cost burdens, while smaller cities and rural areas face lower costs.
According to the OECD's Regions and Cities at a Glance 2024 report, housing costs as a percentage of disposable income show marked regional differences. These costs include rent, mortgages, utilities, furnishings, and maintenance. On average, households in OECD regions allocate nearly one-fifth of their income to housing. However, the gap between the most and least expensive regions in the same country has averaged around ten percentage points. The UK and Italy, in particular, have witnessed the largest regional disparities in housing costs.
For example, in the UK, housing costs take up 16.1% of disposable income on average, with Greater London being the most expensive region. Here, residents spend a staggering 24.4% of their income on housing—51% higher than the national average. The North, on the other hand, has the lowest share at just 8.7%. These disparities, as outlined in the detailed report by Euro News, represent a remarkable 181% difference.
Similarly, Italy faces significant regional housing cost differences. Households on average spend 25% of their disposable income on housing. Campania, centered around Naples, has the highest proportion at 31.2%, while Marche has the lowest at 17.1%, creating a gap of 14.1 percentage points. Other regions like Bolzano-Bozen and Trento also show marked differences, highlighting the diversity of housing costs across the country.
Spain's housing market also reveals stark regional disparities. The Balearic Islands, home to Mallorca, stand out as the most expensive, with households allocating 30.4% of their income to housing costs. This contrasts sharply with Galicia, where only 20.3% of disposable income is spent on housing, demonstrating a gap of 10.1 percentage points.
In other European countries like Austria, Switzerland, Slovakia, and Sweden, housing costs also exhibit regional variation. The Lake Geneva region in Switzerland, for instance, is the most expensive, with housing costs consuming 36.3% of disposable income. Meanwhile, regions in Ireland, Estonia, and Sweden show smaller differences in housing costs but still face considerable regional variations.
The OECD report also highlights the higher housing costs typically found in urban areas compared to rural ones. Price fluctuations have less impact in cities than in non-urban regions, exacerbating the affordability challenge in metropolitan centers.
Homeownership rates are notably lower in areas with higher housing costs. For instance, Vienna's homeownership rate is just 19%, whereas it reaches 74% in Burgenland. Similarly, in Greater London, only 31% of households own their homes, while in less expensive regions like Scotland, homeownership rates are higher. These trends underscore the need for tailored housing policies to address regional disparities.
The data from the OECD emphasizes how housing costs disproportionately affect urban residents, particularly in high-cost regions. These regional gaps require targeted interventions to ensure equitable access to affordable housing across Europe. For further insights on these disparities, visit Euro News.