OXFORD remains one of the least affordable places to live, according to a new study.

Nationally, average mortgage payments for those taking out a new loan made up 26 per cent of disposable take-home pay in the second quarter of this year, Halifax said.

But Oxford came fourth in the list of least affordable areas in the UK, with payments at 50 per cent of disposable earnings.

It sits behind Kensington and Chelsea in London, (76.6 per cent), Brent in London (51.8 per cent) and Hammersmith and Fulham in London (51 per cent).

The most affordable places were in Scotland – East Ayrshire (15 per cent), West Dunbartonshire (16.1 per cent) and Renfrewshire (16.2 per cent).

Across the South East of England, average new mortgage payments as a percentage of disposable earnings fell from 56 per cent in 2007 to 32 per cent this year.

Oxford City Council leader Bob Price said that affordability was a huge issue for the city and especially for young people.

He added: “We have to try as much as we can to create the conditions where cheaper housing can be offered to young people.”

Would-be borrowers are also facing a tougher time trying to take out a mortgage in the first place, as the lenders tighten their borrowing criteria amid the weak economic outlook.

Mortgage approvals slumped to a 15-year low in June, according to recent figures from the British Bankers’ Association.