The average UK house price is eight times the average wage with the majority of least affordable areas in London, new research has found.
Indeed, in London the average price of a home is 14 times the average wage, according to research from eMoov with data compiled from all London boroughs and each area across England, Scotland and Wales to calculate the most expensive versus economical areas for property when compared to the wage earned.
The borough of Kensington and Chelsea tops the list with the average property price at £1,212,375, despite suffering London’s biggest property value decrease in the past year at 6%. The price of property in the borough is now 46 times the average wage of £26,624 and the nation’s biggest gap in wage to property ratio by a long way.
The City of Westminster is number two on the list for most expensive average property prices to wages with the average property is valued at £1,028,617, up 11% annually. With the average wage just £33,020, house prices are therefore 31 times higher than the earnings on offer.
St Alban is next where the average wage is £18,928 and the average house price £522,716, 28 times the average amount earned, then Richmond Upon Thames where it costs 26 times the average wage of £25,636 to get on the property ladder where average price is £659,636, up 9% in the past 12 months.
Regionally, in England the average house price of £232,885 is nine times the average wage of £26,884, in Scotland the average price is £143,711, some five times the average wage of £27,404 and in Wales the average price is £144,828, some six times the average wage of £24.617.
Monmouthshire has the highest average property price to wage ratio in Wales, costing £221,345 but is only ranked 153rd overall in the United Kingdom, with the average house price 12 times the wage.
With property prices also lower in Scotland the resulting gap across the country is just five times the wage. The most expensive Scottish region is East Renfrewshire, despite placing 113th in the whole of the UK, where the average wage is 13 times the average house price in the area.
The City of Edinburgh is second for unaffordability in Scotland, but is still ranked just 210th in the UK as a whole. It would take 10 times the average wage to be able to afford a property in the Scottish capital.
In contrast, Copeland in Cumbria is the most economically affordable area in the UK with the best property to wage ratio at three times the average wage, followed by Blaenau Gwent in Wales with property prices four times the wage, along with Burnley in Lancashire where prices are also four times the wage on offer.
‘Property values in England are significantly higher than the rest of the United Kingdom, which is reflected in the wages offered. However, the wages are not always consistent with property prices and have failed to increase at the same pace,’ said Russell Quirk, chief executive officer of eMoov.
‘It highlights the unaffordability of the market in England when you consider the difference in Wales, where the highest annual average wage is under £21,000 in Cardiff yet the city’s property value is merely third in the country behind regions with lower averages in annual incomes. Additionally, the average wage in Kensington and Chelsea would take almost a lifetime working to be able to afford a home, which is unrealistic for most let alone the average buyer,’ he pointed out.
‘It is important to consider the wage you can earn when buying property to understand the longevity of the investment, as a lower property price doesn’t always mean a better quality of living as the wage will also reflect the local market and economy,’ he added.
Property Wire (October 11th 2016)