The towns and cities where house prices are growing faster than salaries
The UK as a whole saw property values outgrow the average wage increase by 1.13 per cent over the past year
RISING house prices in the popular commuter town of Luton have outpaced the average salary increases by nearly 10 per cent over the past year, according to new data.
Property website Zoopla compared the growth in average house values with annual pay figures from job search engine Adzuna across 55 of Britain’s biggest towns and cities.
It found that the average cost of a house in the Bedfordshire town has grown by more than 5 per cent or £12,499 since June 2016.
In comparison, the average pay earned by residents has decreased by almost 3 per cent or £970 over the same period.
The UK as a whole saw property values outgrow the average wage increases by 1.13 per cent over the past year.
Stevenage was ranked as the second least affordable location as property prices in the area rose by an average of £5,725 over the past year, whereas salaries in the town have decreased by £1,530.
Strong house price growth of about £18,544 saw High Wycombe rank third as salaries have decreased by £308 – a difference of 5.43 per cent.
According to Zoopla, house hunters and first time buyers looking for cheaper locations to live in Britain should move to Sunderland, which tops the table of areas where salaries have been growing at a higher rate than property prices.
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Salaries in the Tyne and Wear city have witnessed an average rise of £650 in the past year, while house prices have dropped by about £8,185 – a 7.81 per cent difference.
Lawrence Hall, spokesperson for Zoopla said that getting on the property ladder can be tough, especially if house hunters are looking to buy in an area where property prices are rising faster than salaries.
“If you’re a first-time buyer and can be flexible where you buy, then why not look at the areas where salaries are rising faster than property prices,” he said
How to get help buying a house
THERE are several government schemes available to help you get on the housing ladder.
- Help to Buy loan: This scheme is for those who have a 5 per cent deposit, and is only available on new-build properties that are worth less than £600,000. The government lends you up to 20 per cent of the property value (interest-free for the first five years) which gives you access to cheaper mortgages. You will need to pay this back at the end of the mortgage or when you sell.
- Starter Homes: First-time buyers under the age of 40 can access this new scheme. You’ll get a 20 per cent discount on the market value of the property (new-build only) but you cannot sell or let the property for five years after you buy it.
- Shared ownership: This scheme is available to non-homeowners who earn £80,000 a year or less (£90,000 in London). People can buy a share of a home from a housing association and continue to rent the remainder. Buyers will need a ten per cent deposit as well as money to cover stamp duty and other fees. You’ll also need to find a mortgage lender that is willing to lend on shared ownership properties
He cited Chelmsford as an example where property prices are increasing at a steady rate, but the average salary is rising even faster.
“The data also shows a clear affordability north-south divide, where the top 10 most unaffordable places regarding house price to salary ratio are all in Southern England,"Mr Hall said.
"In contrast, the top 10 locations where house prices are more in line with salaries, are predominantly in Northern England,” he added.
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