Research reveals gaps between property price growth in UK and salaries
Property price growth is outpacing salary increases the most in the UK in Luton, a commuter town north of London, in the last 12 months, new research has found.
The gap between growth in earnings and property values is 7.99% with prices up 5.06% or £12,499 in the last year compared with the average salary falling by 2.94% or £970 over the same period.
The research from property portal Zoopla also shows that in the UK as a whole property values outgrow the average wage increase by 1.13% with the average home increasing in value by 0.53% year on year, compared with a dip in the average salary of 0.6%.
The comparison of average property price growth with annual salary figures from job search engine Adzuna in 55 towns and cities shows that properties in Newcastle, Bradford and Hull are most affordable when compared to the average local salary.
After Luton the next highest gap was in Stevenage where house price growth is 6.41% higher than average salary growth as values in the area have risen by an average of 1.86% or £5,725 over the past year, whereas salaries in the town have decreased by 4.55% or £1,530.
Strong annual house price growth of 4.4% or £18,544 puts High Wycombe in third place, as salaries have decreased by 1.03% or £308, a difference of 5.43%.
The data also reveals that Sunderland and Chelmsford topped the list of locations where salaries are rising faster and London, Guildford and Winchester are the least affordable place to buy based on local wages.
London tops this table, with the average house in the capital currently valued at 19.53 times the average salary while in Guildford and Winchester it is 18.39 and 17.78 times more than the average salary respectively.
Meanwhile, the most affordable location is Newcastle where house prices are only 4.21 times the average salary of £29,777. Bradford and Hull closely follow with average property prices in both cities 4.62 times the average salary.
‘Getting on the property ladder can be tough, especially if you’re looking to buy in an area where property prices are rising faster than salaries. If you’re a first time buyer and can be flexible where you buy, then why not look at the areas where salaries are rising faster than property prices. For example, in Chelmsford property prices are rising at a steady rate, but the average salary is rising even faster,’ said Lawrence Hall, spokesperson for Zoopla.
‘The data also shows a clear affordability north-south divide, where the top 10 most unaffordable places regarding house price to salary ratio are all in Southern England. In contrast, the top 10 locations where house prices are more in line with salaries, are predominantly in Northern England,’ he added.
Kindly shared by PropertyWire