Exclusive: the economic "divide" between London and the rest of Britain continues to widen

The capital is scooping more new jobs and higher earnings than the national average, while London home owners are seeing the value of their property race ahead, exclusive new research by Halifax reveals.
A new report by Halifax shows the London economy outperforming all other UK regions, boosted 20 per cent in four years. The capital’s house prices rocketed 49 per cent in the same period compared with 19 per cent nationwide. London’s household incomes are 28 per cent higher than the UK average, and while the capital has only 13 per cent of Britain’s population, it produces 22 per cent of the national wealth.

The key findings are:
  • The London economy outperformed all other UK regions, increasing by 20 per cent between 2009 and 2013 compared with the UK average of 13.4 per cent. 
  • London saw the highest percentage increase in workforce jobs between September 2007 and September last year with a 15.6 per cent rise.
  • The capital has the highest Gross Disposable Household Income per head in the UK, at £21,446. This is 28 per cent higher than the national average of £16,791. 
  • Home prices in London have risen by 49 per cent from their 2009 trough, compared with a 19 per cent increase nationally.
  • Property prices in the capital are now 10 per cent above their 2007 peak. Nationally, prices remain six per cent below their 2007 peak. 
  • Londoners have the lowest levels of savings relative to earnings — which may partly reflect the city’s younger age profile. The average savings balance is equivalent to 26 per cent of average annual pre-tax earnings in the capital, whereas the average proportion in England and Wales is 35 per cent.  
 

IMAGE GALLERY: HOT HOMES WITHIN A 45-MINUTE COMMUTE OF LONDON



The latest annual London Factor report from Halifax also finds those living in the capital tend to be more highly educated and have above-average life expectancy. On the downside, crime is higher and costs associated with running a home are considerably higher than in any other region in the UK.

Halifax economist Martin Ellis says: “As a leading global city, London provides major economic, social and cultural benefits not just to those who live in the capital but also for the rest of the country. The London economy has performed more strongly than any other part of the UK in recent years, resulting in a widening gap between the capital and the rest of the country.

“This economic success, however, comes at a cost. Property prices are substantially higher than elsewhere in the UK and the property divide has widened further in recent years. Crime also tends to be higher.”

Follow us on Twitter @HomesProperty and Facebook

Comments