Number of homes ‘earning’ more than owners falls
Number of homes ‘earning’ more than their owners falls thanks to property price slowdown – we reveal the pockets bucking the trend
- Prices in Richmond upon Thames rose £55,483 more than average earnings
- It has the biggest gap between property inflation and wages
- The difference is £55,482, the equivalent of £2,312 a month
- Wandsworth is the only other London borough to make the top 10
The gulf between money homeowners earn from their day jobs and they ‘earn’ from their property is shrinking, annual research shows.
Homeowners in many parts of the country have previously seen the value of their property increase by more than the amount they earn via an annual wage.
But a slowdown in house price rises means this is no longer the case in many locations.
Fewer than eight per cent of areas ‘earn’ more than their homeowners, looking at the last two years, according to Halifax. It compares to 18 per cent in 2017 and 31 per cent in 2016.
Map shows the difference in house prices and earnings over a two-year period
House prices outstrip their owners’ salaries in South-West London’s Richmond-Upon-Thames
One of the few remaining areas where house prices outstrip their owners’ salaries is Richmond-Upon-Thames, in SW London.
It has the biggest gap between property inflation and wages at £55,482, or the equivalent of £2,312 a month.
It equates to more than 80 per cent of the average deposit on a property bought in Britain, although it falls far short of the average deposit in London of £137,638.
The next biggest gap is in Winchester, Hampshire, at £45,016. Wandsworth is the only other London borough to make the top 10, which is in stark contrast to a year earlier when nine of the top local authority districts were in the capital.
Wandsworth is the only other London borough to make the top 10
House prices outstrip their owners’ salaries in West Devon, according to the Halifax research
Russell Galley, managing director of Halifax, said: ‘While the slowdown in house price growth may not be welcomed by homeowners, the narrowing gap between prices and wages should improve affordability for all, meaning larger houses, home extensions or even first properties are more attainable.
‘Although every region of Britain saw earnings exceed price growth overall, there continues to be significant variations across the country.
‘The majority of areas where house price inflation outpaced owners’ take-home pay are still to be found in London and the South East.’
A total of 28 individual local authorities recorded average house price increases in excess of total average pay in the last two years.
However, all 12 regions in Britain saw average earnings exceed house price inflation, from £19,649 in London up to £35,250 in Scotland.
When looking across a five-year period, the area with the biggest margin was Three Rivers in the East at £88,281.
It comes after separate figures revealed this week that the rate of annual house price growth in Britain fell to its lowest level for nearly seven years as the property market in London and the South East suffered a significant reversal.
The average value of a home in Britain rose by 0.6 per cent in the year to February, down from an annual increase of 1.7 per cent in the previous month, according to data from the Office for National Statistics and the Land Registry.
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