Bradford is the third most affordable city in the UK to buy a home, according to new research published today.

In its new affordable cities review Lloyds TSB bank says the average UK price of a city home is now the lowest since 2003, standing at £173,202 and equivalent to 5.5 times gross national average earnings of £31,427. This compares with an income ratio of 5.7 times a year ago and 7.2 times in 2003.

In Bradford, where the average house price is £108,016, the earnings ratio is 3.98 times average gross income, which puts the city third behind Salford in the North West and Londonderry in Northern Ireland in terms of housing affordability. In 2002, Bradford was the most affordable UK city with a cost to income ratio of 2.73.

The research says the marked improvement in affordability over recent years has been driven by the significant fall in city house prices. Since 2008, the average city house price has fallen by 18 per cent from £210,605 in 2008 to £173,202 in 2012.

The findings have flagged up a significant North-South divide in housing affordability, with all 16 of the most affordable cities in the North and the 15 least affordable cities all in southern England.

City house prices, as a multiple of earnings, remain higher than a decade ago at 5.5 times gross annual average earnings compared to 4.7 in 2002.

The least affordable cities are Truro in Cornwall where the average house price is £250,489, equivalent to 9.71 times average gross income, and Oxford, with a ratio of 8.8.

Suren Thiru, housing economist at Lloyds TSB, said: “The improvement in housing affordability within many of our major urban conurbations has been significant during the past few years and reflects the decline in house prices over the period. There is, however, a distinct North-South divide to the locations of the most affordable UK cities.

“Looking forward, this marked improvement is likely to help support demand for those wanting to enter the housing market. Much of this benefit, however, may be offset by the continuing difficulties many households face in raising a deposit and uncertainty over the outlook for the UK economy.”