Did Your House Have a Pay Rise?
With all the discussion in the news about the housing market cooling down it would be easy to take a negative view. However an article recentlypublished by Zoopla gives a different perspective. They ask – how much was your latest pay rise? Chances are, it was less than the value increase of your home over the past 12 months, says the Zooplaresearch.
Propertyvalues in Britain outpaced average wage increases by 1.13% in the past year, according to the latest Zoopla research. Average home values across the country increased by 0.53% in the 12 months to June, while national average incomes moved by-0.6%.
Zoopla compared its own property data across 55 of Britain’s biggest towns and citieswith annual salary figures from job website Adzuna, to access the average ‘salary growth-to-property-price growth’ ratio. Using this ratio, Luton emerged as the least affordable of the 55 locations. The large Bedfordshire town saw average local salaries fallby 2.94% to £32,067during the last 12 months, while its property prices jumped5.06% to £259,715. This puts the salary-to-property price growth ratio down at -7.99%.
Stevenage and High Wycombe, where growth in the value of homes outpaced salary rises by -6.41% and-5.43% respectively, emerged as the next least affordable places to live during thelast year. Conversely, Sunderland and Chelmsford were the most affordable locations.Sunderland saw salary increases outdo property price growth by a ratio of7.81%, while Chelmsford rung in second at7.68%.
While the latest evidence suggests that growth in Britain’s housing market is continuing to cool, national property values have not dropped in real terms. And, in many cases, homeowners will wait longer for a pay rise at work than for an increase in the value of their home. However, as Zoopla’s research shows, this is not always the case. Britain isalso littered with property ‘micro markets’. In some areas, house prices are static or, as is currently the case in Aberdeen, falling.
Zoopla also looked at a snapshot of the disparity between average earnings and property prices across Britain. Unsurprisingly, the highest property price-to-salary ratio is found in London, where a typical home costs almost 20 times(19.53) average local earnings. It’s followed by Guildford, Surreywhere average property is worth18.39 times local earnings, and the city of Winchester where it’s worth17.78 times. Newcastle, where property prices are 4.21 times the average salary, is the most affordable place to live, followed by Bradford and Hull which both come in at 4.62 times.
Article taken in part from www.zoopla.co.uk
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