House price growth is outpacing earnings in one in five areas of the UK, new statistics have revealed.
House price growth is outpacing earnings in one in five areas of the UK, new statistics have revealed.
Data released by Halifax reported Barnet in London and North Hertfordshire had recorded the biggest leaps. In the last two years homeowners there earned more from their homes than their jobs by £52,256 and £40,903 respectively.
However, the proportion of areas in the UK where house price growth was increasing by more than total average earnings had actually dropped in the last two years, suggesting a slowdown in market growth.
According to Halifax areas of the UK where property prices were outpacing earnings had fallen from 31% in 2016 to 18% in 2017 – or from 119 areas to 71.
Russell Galley, managing director at Halifax, said: “Over 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.”
Halifax’s research also found London, the South East, South West or East of England contained 86% of the areas where the average house price rise was greater than local median earnings over the last two years, suggesting a continuation of the ‘north/south divide’.
In the past five years, 73 local areas in the UK had seen average house prices rise by more than the total pay. Nine of the top areas were in London.
Barnet recorded the highest, with average property price increases of £246,999 surpassing the average take-home pay during the period by £116,734.
Nationally, the average UK house price increase over the past five years was £78,400, which was higher than the earnings in three employment sectors over that time, according to Halifax.
