Guaranteed Rent - Rent Income
  • Homeowners in Haringey ‘earn’ over £91,000 more on their home than at work over two years (£3,810 per month)
  • House prices outpace owners’ earnings in 119 local areas
  • 17% of all UK local areas have seen average house prices increase by more than total average pay

New research suggests that the last two years the average house prices have increased in a third of local authority districts (LADs) across the UK, to the point that outpaced average employees’ net earnings.

According to the new research from Halifax, the proportion of areas where house prices are outpacing earnings over the last two years has edged up from 28% in 2015 to 31%.

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).

House Prices v Earnings Top 10 over last two years

Local Authority Region 2 Year Change In House Prices* £ Net Median Earnings 2 Year (2015-2016)** £ 2 Year £ Difference in House Prices v 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, ** Halifax calculation, ONS

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.

House Prices v Earnings – Top 10 over last five Years

Local Authority Region 5 Year Change In House Prices* £ Net Median Earnings 5 Year (2012-2016)** £ 5 Year £ Difference in House Prices v Earnings
Haringey London 242,121 117,821 124,300
Harrow London 238,543 123,021 115,522
Waltham Forest London 218,770 113,575 105,195
Three Rivers East of England 226,487 125,405 101,082
Ealing London 204,332 116,993 87,340
Brent London 195,903 114,107 81,796
Southwark London 202,286 129,272 73,014
Lambeth London 199,322 127,082 72,240
Lewisham London 194,869 124,274 70,595
Greenwich London 191,607 121,200 70,407

Source: *Halifax, ** Halifax calculation, ONS

Source: https://guaranteemyrent.com/homeowners-earning-properties-day-job/