According to Halifax, in 73 out of 384 UK local authority districts, house prices increased by more than the average employee’s net earnings over the last two years.
The vast majority of areas where house prices exceeded earnings were in London, the South East and East, with eight London boroughs representing the top 10 areas of higher house price growth.
In Hammersmith and Fulham, house prices jumped by an average of £199,930 over the last two years, surpassing average take-home earnings in the area by £143,232. Outside London, the South East and East, the Cotswolds experienced the highest rate of house price growth, with gains exceeding earnings by £31,222.
In 2014 alone, house prices increased by 9%, the biggest annual rise since 2007, Halifax said. Average prices in London and the South East saw a significant upswing of 16% and 11%, respectively, with house prices increasing by more than total take-home pay in one quarter of local authority districts as a result.
Martin Ellis, housing economist at Halifax, said: “The housing market recovery over the past couple of years has resulted in some substantial prices rises in some areas of the country, particularly in London and the South East. This has resulted in homes increasing in value by more than total take-home earnings for the average homeowner in some areas of the country.
“This is good news for some homeowners. At the same time, it is challenging news for those looking to buy their first home in such areas, with prices being pushed out of range for many young people.”
