Homeowners in many districts of Britain are ‘earning’ more from their properties than from turning up to work, it has been revealed.
The gulf between wages and property inflation is highlighted by a new report suggesting that the average rise in house prices is outstripping post-tax earnings in a fifth of local authority districts.
The biggest gap between the rise in house prices and earnings is in London‘s Barnet, where the average home rose in value by £50,000.
Halifax has produced a report highlighting the gulf between wages and property inflation, with London and the South East dominating the list of top 10 local authorities
The biggest gap between house prices and earnings is in London’s Barnet
The gap between house price growth and earnings in Worthing is £29,871
The well-connected borough in North London is around half an hour from the capital’s centre via a choice of different tube stations, including High Barnet on the Northern Line.
Sarah Beeny, founder of estate agent, Tepilo.com, said: ‘Sitting on the outskirts of London, Barnet is a fantastic location for people who need fast commuter lines, but who also crave beautiful open green spaces, which it provides.
‘The borough has a thriving town centre and is a hive of activity with excellent local schools and great amenities. It’s certainly not cheap, but actually, there are some really affordable properties if you look in the right places.’
Barnet is situated on a hill and has far-reaching views, with the average house price rising more than £100,000 in the past two years, while the typical wage is £54,641.
It produces a gap between wages and property inflation of £52,256, the equivalent of £2,177 a month, according to the Halifax report.
The next biggest gap can be seen in North Hertfordshire in the East of England, the only place outside of the capital and the South East featuring in the top 10 list of local authorities produced by Halifax.
The borough’s town of Hertford is also a well-connected area with two stations running 40 minute services into the City.
Other local authorities featuring in the top 10 include East London’s Newham, Worthing in West Sussex and Canterbury in Kent.
The gap between house price growth and earnings in Canterbury, Kent, is £28,345
Oxford has a house price growth to earnings difference of £22,513 (Pictured: Abingdon)
The data highlights the continuing division between the north and south of Britain, with 86 per cent of areas where the average house price rise is greater than local wags in the last two years being in London, the South East, the South West or East of England.
However, this share is down slightly from the previous year when 93 per cent of areas were in these four regions.
The top performers outside of the south of the country include Harborough in the West Midlands, with house price gains £19,662 more than earnings during the past two years.
Ribble Valley in the North West at £8,217, Tamworth in the West Midlands at £3,226 and Denbighshire in Wales at £793 all saw house prices outperform wages.
Across Britain, property price rises have outstripped post-tax earnings in 18 per cent of local authorities, down from 31 per cent in 2017, the report revealed.
The gap between house price growth and earnings in Fareham is £20,016
The gap between house price growth and earnings in Croydon is £27,386
The gap between house price growth and earnings in Merton is £20,016 (Pictured: Mitcham)
|Region||Average Deposit 2017 £|
|Yorkshire and The Humber||46,954|
|East of England||92,926|
Russell Galley, managing director at Halifax, said: ‘In the past two years, we have seen house price growth and earnings converge at a national level, leading to a drop in the total number of areas where the average house price rise is greater than owners’ take-home earnings.
‘Despite the slowdown in house price growth in southern England, it has still outpaced wages across most of the region. This means that middle earners are also facing a challenge getting on to the property ladder.’
The research also revealed the average deposit size across each region, ranging from the largest in London at £135,272 to the lowest in Northern Ireland at £33,676.
The average deposit size in the South East is also above £100,000 at £104,156. This is perhaps unsurprising given house prices tend to be higher in this region.
|Local Authority||Region||5 Year Change In House Prices* £||Net Median Earnings 5 Year (2013-2017)** £||5 Year £ Difference in House Prices v Earnings|
|Hertsmere||East of England||186,383||115,101||71,281|