Average house prices have risen by more than the average employee’s net earnings in more than a quarter of UK local authority districts since 2014, according to the latest Halifax research.
This occurred in 108 out of 380 postal districts over the past two years.
The number of areas where house prices are outpacing earnings over the last two years has increased significantly over the past year: from 73 out of 384 (19%) a year ago to 108 out of 380 (28%).
The vast majority of these areas are in London, the south east, and east of England with these three regions representing 97 of the 108 (90%).
The biggest gap between rising property values and earnings was in Three Rivers in Hertfordshire, where house prices increased by an average of £147,990 over the last two years, exceeding average take-home earnings in the area by £97,992. Seven London boroughs appear in the top 10 districts.
House Prices v Earnings – Top 10 over Last 2 Years
| Local Authority | Region | 2 Year Change In House Prices £ | Net Median Earnings 2 Year (2014-2015) | 2 Year £ Difference in House Prices v Earnings |
| Three Rivers | East of England | 147,990 | 49,999 | 97,992 |
| Harrow | London | 147,068 | 49,595 | 97,472 |
| Greenwich | London | 131,811 | 48,543 | 83,268 |
| Hillingdon | London | 132,125 | 49,976 | 82,149 |
| Brent | London | 120,031 | 46,884 | 73,147 |
| Watford | East of England | 121,646 | 49,823 | 71,823 |
| Waltham Forest | London | 115,908 | 45,230 | 70,678 |
| Ealing | London | 115,724 | 46,238 | 69,486 |
| Cambridge | East of England | 115,650 | 49,030 | 66,620 |
| Merton | London | 116,119 | 50,791 | 65,328 |
Source: Halifax, ONS
The top performers outside southern England were Warwick in the West Midlands and South Northamptonshire in the East Midlands, with house price gains in excess of earnings of £24,723 and £14,837 respectively during 2014 and 2015.
Martin Ellis, housing economist at Halifax, said: “The housing market recovery over the last few years has led to substantial price rises in some areas of the country, particularly in London, the south east and the east of England. This has resulted in homes increasing in value by more than total take-home earnings for the average homeowner in many areas of the country.
“Clearly, this is good news for some homeowners. However, it does make conditions tougher for those looking to buy their first home in such areas, with prices being pushed increasingly out of range for many young people.”