The gulf between earnings and property price inflation has shrunk considerably across the UK in recent years, according to new research by 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. That trend is now shifting as a result of weaker house price inflation and stronger wage growth.
The average rise in house prices over the last two years has outstripped post-tax earnings in fewer than one in 10 (8%) local authority districts (LADs). This compares to almost one in five (18%) in 2017 and nearly a third (31%) in 2016.
London borough Richmond-upon-Thames is one of those few, producing the biggest gap between property inflation and wages at £55,482, or the equivalent of £2,312 a month. This equates to more than 80% of the average deposit on UK house purchases, but still far short of the London average of £137,638.
The next biggest gap was found in Winchester, home to much of the South Downs National Park, in the South East of England (£45,016). Wandsworth was the only other London borough to make the top 10, in stark contrast to a year ago, when nine of the top 10 LADs were in the capital.
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