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Do you earn more from your home than your job?

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23/04/2019
Fewer local authorities have seen house price increases outstrip average earnings, but in 8% of areas properties are still earning more than their owners
Do you earn more from your home than your job?

The gap between earnings and house price inflation has narrowed across the UK in recent years, according to Halifax.

Historically, homeowners in many locations found themselves ‘earning’ more from the annual increase in the value of their property than from their take-home pay. But weaker house price inflation and stronger wage growth have put an end to that trend – in most areas, at least.

The average rise in house prices over the last two years has still outstripped post-tax earnings in 8% of local authority districts – a far cry from the 31% recorded in 2016.

Where are homes earning more?

Richmond-upon-Thames in London is one of those few areas where house prices are still beating earnings, with the biggest gap between property inflation and wages at £55,482, or £2,312 a month.

The next biggest gap was found in Winchester, in the South East of England, where price rises outstripped earnings by a massive £45,016.

Wandsworth was the only other London borough to make the top 10, which was completed by South Bucks, West Devon, Windsor and Maidenhead, Bromsgrove, Chichester, North Dorset and Harborough.

Regional trends

Despite 28 individual local authorities recording average house price increases in excess of total average pay over the last two years, at a regional level, the picture was more consistent.

All 12 regions of the UK saw average earnings exceed house price inflation this year, from £19,649 in London up to £35,250 in Scotland.

Russell Galley, managing director of Halifax, said: “While the slowdown in house price growth may not be welcomed by homeowners, the narrowing gap between prices and wages should improve mortgage affordability for all, meaning that larger house, home extension or even first property are all more attainable.

“Although every region of the UK saw earnings exceed price growth overall, there continue to be significant variations across the country. The majority of areas where house price inflation outpaced owners’ take-home pay are still to be found in London and the South East.”

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