There is a close relationship between the levels of savings balances and house prices, although there are exceptions, according to research from Halifax.
The London boroughs of Hackney, Newham, Lewisham and Southwark are all amongst the five areas in the UK with the lowest average savings balances (all under £4,000) but each has an average house price that is significantly above the national average. House prices in Hackney, Southwark and Lewisham are also higher than the average for London as a whole.
Halifax said there are many areas where there is a strong relationship between high savings balances and high house prices. Five of the 10 local districts with the largest average savings balances also feature in the 10 areas with the highest average house prices in the country.
Residents of Kensington and Chelsea are not only some of the biggest savers – fourth highest average in the UK with an average customer balance of £9,6541 – but houses in the Royal Borough also command the highest average property price, at £634,637 (262% above the UK average of £175,483).
The other four areas that feature in both the top 10 rankings for highest average savings balance and average house prices are Mole Valley (savings balance of £9,768 and average house price of £379,396), Chiltern (£9,567 and £413,802), Elmbridge (£9,217 and £409,606) and Richmond-upon- Thames (£9,116 and £428,466).
Residents in South Buckinghamshire and St. Albans are also amongst the 10 areas with the highest savings balances in the country and have an average house price that is more than twice the national average.
Christchurch in Dorset and Derbyshire Dales are also amongst the top 10 areas for savings balances and both have average house prices that are above both the national and regional averages.
Shetland Islands is the only area in the national top 10 for savings where the average house price is below the national (-25%) and regional (-7%) average.
The lowest average savings balances are held by those living in the London borough of Hackney (£3,224) however, the average house price in Hackney (£305,136) is 74% above the UK average and 6% above the Greater London average. Another London borough, Southwark, is also one of the 10 areas with the lowest average savings balances, but has an average house price that is 86% above the UK average and 13% higher than the London average.
Only two of the 10 areas in the country with the lowest average savings balances are also amongst the 10 areas with the lowest average house prices: Hull (savings of £4,133 and an average house price of £100,550) and North Lanarkshire (£4,225 and £104,148).
There are, however, three areas that are in the bottom 10 for average savings balances and have below national average house prices: Manchester, Glasgow and Knowsley. All three areas also have house prices that are below their regional averages. Overall, seven of the 10 areas with the lowest savings balances in the country also have house prices that are below the regional average.
Nitesh Patel, economist at Halifax, said: “The relationship between savings balances and house prices is typically a strong one although there are some exceptions
