March 13, 2017
Homeowners in a third of neighbourhoods across the UK earn more from bricks and mortar than their day job.
According to Halifax, the proportion of local areas where house prices have outpaced earnings over the last two years has edged up from 28% in 2015 to 31%.
The biggest gap between climbing property values and earnings is in Haringey, where homeowners earn £3,810 a month more from their home.
House prices in the London borough increased by an average £139,803 over the last two years, outstripping take-home earnings of £48,353 over the same period.
Over the past five years, 17% of local areas have seen average house prices rise by more than pay.
Who does it affect?
It’s great news for existing homeowners who have the potential to crystallise their housing equity when they sell up in one of these lucrative areas.
But it doesn’t bode well for some buyers, particularly those trying to get on to the housing ladder for the first time.
Martin Ellis, housing economist at Halifax, said: “Homeowners in these areas can build up large levels of equity quickly, but for potential buyers whose wages have failed to keep pace, the cost of buying a home has become more unaffordable during that time.”
Sounds interesting. What’s the background?
More than nine out of 10 areas where homeowners earn more from property than their day job are in London, the south east, south west and east of England. In fact, six London boroughs appear in the top 10 areas.