British houses 'earn' more than their owners: average home rose by almost £20k across the country and £46k in London

Two out of five workers earned less than the average UK home value rose in the last year.

The average house earned more last year than nearly half of all workers, figures revealed today.

House prices across Britain rose by £18,000, more than the salary of nearly 40 per cent of the workforce, according to Post Office Money.

Its Cost Of Buying And Moving report revealed the average price rise almost matched the starting salaries of professions including nurses, teachers, junior hospital doctors and police officers, who all start on around £22,000.

 

London and South East

In London, the average home made £46,000 for its owner, compared with the average salary in the capital of £36,000.

A recent report by the Halifax revealed that the biggest gap between wages and property prices was in Three Rivers, Hertfordshire, where house prices have risen by £148,000 in the last two years, exceeding average earnings by £98,000.

Three Rivers is increasingly popular among London commuters thanks to the Metropolitan line and includes Rickmansworth and Abbots Langley.

The second biggest gap was in Harrow, north-west London, a borough that regularly features in top 10 lists of fastest rising prices.

Greenwich was third thanks to it becoming a regeneration hotspot offering river views from almost every direction. It is minutes from Canary Wharf on the Docklands Light Railway and Jubilee line and will have a new Crossrail station in 2018, making it even faster to get to the City.

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In Hertfordshire property prices have risen by £148,000 in the last two years, exceeding average earnings by £98,000

Slowing rises

The average house price rise in the UK was £5,800 lower between December 2014 and December 2015 compared with the previous year, while workers’ wages rose by an average of £400 to £26,400.

In London, the average rise fell by £11,300 from £57,600, but this still means the average home in the capital costs £536,000, while average prices elsewhere were £365,000 in the South East and £315,000 in the East.

Rising demand

John Willcock, head of mortgages at Post Office Money, said: “Although the rate at which property prices have increased has slowed compared with the dramatic rises seen in 2014 and early 2015, we have still seen a big increase in prices over the last year.

“This has been driven by demand for housing outstripping supply, with the number of properties coming to market failing to match the needs of people looking to buy. “

“While this is good news for those who already own their home and will see their property wealth increase, our study highlights the uphill struggle that buyers and movers looking to climb the property ladder continue to face, especially when attempting to get on that all-important first rung.”

Predicting the future

Mr Willcock added: “Forecasts seem to indicate a year of two halves in 2016, with prices pushed up before April as buyers races to beat the new stamp duty surcharge on second homes, but then weakening following its introduction and uncertainty around the UK’s position in Europe.

“In the medium term, house prices look likely to continue to rise as demand for property continues to outstrip the supply of new homes.”

 


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