House prices have been on a continual upwards spiral in recent years, so much so that they've smashed through previous records and boosted the amount of equity their owners have in the process. Breaking it down puts things into even sharper perspective, and research from Halifax has revealed just how much these houses have earned – and the results may surprise you.
The figures show that average house prices have increased by more than the average employee's net earnings in 28% of local authority districts (108 out of 380) across the UK over the past two years, and the figure's risen significantly over the last year: a year ago just 19% of local authorities saw house price rises outpace earnings.
Perhaps unsurprisingly, the vast majority of these wage-beating areas are in London, as well as the South East and East of England, with these regions representing 90% of the 108 districts. In fact, the biggest gap between rising property values and earnings was in Three Rivers in Hertfordshire, where house prices have increased by an average of £147,990 over the last two years, exceeding average take-home earnings in the area (£49,999) by £97,992.
Martin Ellis, housing economist at Halifax, commented on the findings: "The housing market recovery over the last few years has led to substantial price rises in some areas of the country, particularly in London, the South East and the East of England. This has resulted in homes increasing in value by more than total take-home earnings for the average homeowner in many areas of the country.
"Clearly, this is good news for some homeowners. However, it does make conditions tougher for those looking to buy their first home in such areas, with prices being pushed increasingly out of range for many young people."
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