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, according to new research from Halifax.
The data found that the proportion of areas where house prices are outpacing earnings over the last two years has edged up from 28% 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%) 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). In total, six London boroughs appear in the top 10 districts, including Newham (£63,583), Redbridge (£56,528) and Hounslow (£54,569).
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).
Over the past five years, 64 local areas in the UK (17% of the total) have seen average house prices increase by more than total average pay.
Four areas have recorded a differential of over £100,000 over the past five years. The greatest was again Haringey, where average property prices have increased by £242,121, surpassing average take-home pay during the period by £124,300. Haringey is followed by Harrow (£115,522), Watham Forest (£105,195) and Three Rivers (£101,082). Nine of the top 10 performers are in London.
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.”
House prices vs earnings Top 10 over last two years
| Local Authority | Region | Two-year change in house prices | Net median earnings two-year (2015-2016) | Two-year difference in house prices vs earnings |
| Haringey | London | £139,803 | £48,353 | £91,450 |
| Harrow | London | £128,841 | £51,050 | £77,791 |
| St Albans | East of England | £131,645 | £58,651 | £72,995 |
| Waltham Forest | London | £111,076 | £47,430 | £63,646 |
| Newham | London | £107,302 | £43,719 | £63,583 |
| Watford | East of England | £113,704 | £51,133 | £62,571 |
| Slough | South East | £103,175 | £44,796 | £58,379 |
| Redbridge | London | £109,866 | £53,337 | £56,528 |
| Three Rivers | East of England | £106,135 | £49,985 | £56,151 |
| Hounslow | London | £101,940 | £47,281 | £54,659 |
Source: Halifax, ONS
House prices vs earnings – top performing local authority districts in region over last two years
| Region | Local authority district | Two-year change in house prices | Net median earnings two-year (2015-2016) | Two-year difference in house prices vs earnings |
| North East | South Tyneside | £35,709 | £39,033 | -£3,324 |
| North West | Trafford | £64,539 | £50,368 | £14,170 |
| Yorkshire and The Humber | Harrogate | £56,914 | £44,406 | £12,508 |
| East Midlands | South Northamptonshire | £80,954 | £47,439 | £33,514 |
| West Midlands | Warwick | £69,352 | £48,111 | £21,240 |
| East of England | St Albans | £131,645 | £58,651 | £72,995 |
| London | Haringey | £139,803 | £48,353 | £91,450 |
| South East | Slough | £103,175 | £44,796 | £58,379 |
| South West | East Dorset | £86,527 | £44,989 | £41,538 |
| Wales | Isle of Anglesey | £39,926 | £38,259 | £1,668 |
| Scotland | East Dunbartonshire | £39,216 | £50,726 | -£11,510 |
| Northern Ireland | Antrim and Newtownabbey | £26,799 | £42,749 | -£15,951 |
Source: Halifax, ONS
