UK homeowners earn more from bricks and mortar than their job

Some UK homeowners are now earning more from their properties than from their actual job, new research reveals.

Data from Halifax shows that average house prices have increased by more than total average employees’ net earnings in a third of local authority districts across the UK in the past two years. Indeed, in a sign of how much property values have appreciated, Halifax’s research found that the proportion of areas where house prices are outpacing earnings over the last two years has edged up from 28 per cent in 2015.

More than nine out of 10 are in London, the South East, South West and the East of England with these four regions accounting for 111 of the 119 (93 per cent) areas. The biggest gap between rising property values and earnings was in Haringey in London. House prices in the borough increased by an average of 139,803 over the last two years, exceeding average take-home earnings in the area of £48,353 over the same period – a difference of £91,450, equivalent to £3,810 per month.

Haringey is followed by Harrow in north London with a price growth to earnings difference of £77,791, St Albans (£72,995) and Waltham Forest (£63,646). Six London boroughs appear in the top 10 districts, including Newham (£63,583), Redbridge (£56,528) and Hounslow (£54,569).

Martin Ellis, housing economist at Halifax, said: “Buoyancy in the housing market over the past two to five years has resulted in homes increasing in value by more than total take-home earnings for the average homeowner in many areas, though mostly in southern England. While it’s no longer unusual for houses to ‘earn’ more than the people living in them in some places, there are clearly local impacts. Homeowners in these areas can build up large levels of equity quickly, but for potential buyers whose wages have failed to keep pace, the cost of buying a home has become more unaffordable during that time.”

The top performers outside southern England include South Northamptonshire in the East Midlands, with house price gains in excess of earnings of £33,514 over the period 2015 and 2016. This is followed by Warwick in the West Midlands (£21,240), Trafford in Greater Manchester (£14,170) and Harrogate in North Yorkshire (£12,508). The only regions where the top performing local area recorded earnings exceeded house price increases were the North East (-£3,324), Scotland (-£11,510) and Northern Ireland (-£15,951).


Luton leads house price growth in the UK

11th January 2017

When it comes to house price growth, London has long ruled the roost, but as the capital cools, the country has a new housing hotspot: Luton.

The city recorded the biggest percentage rise in house prices among major UK towns and cities over 2016, according to new research by Halifax. The average house price in the Bedfordshire town was 19.4 per cent higher than in the previous year, increasing from £214,934 to £256,636 in 2016. This is more than two and a half times the 7.5 per cent increase in the UK as a whole.

The outer London borough of Barking and Dagenham experienced the second biggest rise in average house prices with an increase of 18.6 per cent. Dunstable – Luton’s near neighbour – completes the top three with a 17.9 per cent rise in the past year.

While the capital is not the number one hotspot any more, though, all 10 top performers are in London and the South East. Basildon (17.2 per cent), Chatham (17.1 per cent), Tower Hamlets (15.8 per cent), Watford (15.3 per cent) and Basingstoke (15.1 per cent) also all recorded price rises that were at least double the national average.

A small number of towns recorded declines in house prices in 2016. By far the most significant fall was in Aberdeen (-6.9 per cent) in Scotland. There were also marginal price decreases in a number of other towns. In Scotland – Falkirk (-1.1 per cent) and Inverness (-0.9 per cent), in Northern Ireland – Bangor (-1.7 per cent) and Londonderry (-0.4 per cent) and northern England – Blackpool (-0.5 per cent) and Stockton on Tees (-0.1 per cent).

“Most of the areas that have seen the biggest house price rises during 2016 are either within close commuting distance of the capital or in outer London,” says Martin Ellis, housing economist at Halifax. “Demand in these areas has risen as substantial property price rises in central London over the last few years have caused increasing numbers of people to seek property in more affordable areas.”