The places where house prices pay more than the day job – do you live in a boom hotspot?

BOOMING property prices across the country mean that homes in a third of local areas have “earned” more than their owners over the past five years.

Average house prices in certain areas of the UK have outpaced average employees’ earnings in 31 per cent of local authority districts.

The proportion of areas where house prices have risen by more than average employees’ net earnings has increased since 2015, when it stood at 28 per cent.

House prices in Haringey, London, for example, have risen by £242,121 in the past five years, exceeding average take-home earnings in the area of £117,821 over the same period – a difference of £124,300, which is equivalent to £2,071 per month.

Harrow in north London came second on the list, with average house price growth there outpacing average earnings by £115,522 over the past five years.

London, the south east and south west of England and the east of England account for more than nine in 10 (93 per cent) of the areas where house prices are rising by more than their owners are bringing in from their day job.

Martin Ellis, housing economist at Halifax, said: “Buoyancy in the housing market over the past two to five years has resulted in homes increasing in value by more than total take-home earnings for the average homeowner in many areas, though mostly in southern England.

“While it’s no longer unusual for houses to ‘earn’ more than the people living in them in some places, there are clearly local impacts.”

Ellis continued: “Homeowners in these areas can build up large levels of equity quickly, but for potential buyers whose wages have failed to keep pace, the cost of buying a home has become more un-affordable during that time.”

Halifax found there were no local authority districts in north east of England, Scotland and Northern Ireland where house price growth has out-paced earnings over the last two years.

According to a property price index published last month, house prices in Liverpool, Birmingham and Manchester are now rising more quickly than in London, with house price growth in the capital weakening.

Year-on-year house price growth in London was 6.4 per cent in January – the lowest level recorded since June 2013.

Nevertheless, house prices in the capital are still ludicrously high.

This tiny 8.5 ft wide London property recently went on the market for the first time in 50 years, and it costs almost three times the UK average price.

The tiny Chelsea pad has an asking price of £600,000, despite the fact that it has just 290sq/ft of floor space and is in need of a full renovation.

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