Houses around the UK earning more than their owners’ yearly salaries
Property prices have been on the move during the past year in the UK, in some places more so than others. Recent data is now showing that in certain areas, house prices have risen so dramatically that their increases have bypassed their owners’ salaries for the whole year, some even outstripping them hugely.
On average, across England and Wales, house prices increased by around 7% between April 2013 and April 2014. The average house price now sits at around £172,069, a rise of £10,809 on the past year according to figures released by the Land Registry. The median earnings for 2013 up to April for the whole country in comparison comes out at £22,045.
The more buoyant market in several more prosperous areas however has seen property prices soar, some even into the tens of thousands more than the previous year. There are a total of 33 areas where local wages are being outstripped by the increase in property prices; most prominent are the increasing prices in the south of England and the boroughs of London. London’s property prices overall have risen by 17% in the year to April.
Westminster in central London has seen the biggest boost with a price rise of £160,810 in the past year, taking the average property price up to an astounding £976,822. Even in this dramatically wealthy area, the median average salary in Westminster comes out at a measly comparison rate of £34,092.
Hammersmith and Hackney followed closely behind Westminster in the average property price increase at £126,587 and £125,788 respectively, while average yearly earnings in Hammersmith come out at £33,082 and in Hackney at only £27,895.
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Even outside the capital, comparisons are being drawn between house price increases and salaries, with the average income of a Sandwell resident, just outside Birmingham, standing at £18,934 yearly, while their house prices increased on average by £21,945. Wales too saw record surges in house prices in Powys of £25,621 while median wages totalled up at £17,725.
While this appears to be great news for property owners, it’s becoming more and more bleak for those not yet on the property ladders. Labour’s shadow housing minister, Emma Reynolds, said:
“These figures show that the dream of home ownership is slipping further out of reach for working people. To tackle this crisis we need to build many more homes.”
There are also fears that the Help to Buy scheme using taxpayer-backed mortgages has increased demand for houses for first time buyers, but the supply of new homes is staying low.