A fifth of UK homes rising in value by more than the average UK salary

More than 4.6 million properties, amounting to more than a fifth (21%) of all UK homes, have risen in value by more than the average annual salary in the past year, according to new research from Zoopla.

Related topics:  Finance News
Rozi Jones
16th July 2021
pound coins money scales balance house prices
"One in five homes in the UK have risen in value by more than the equivalent of a years’ salary over the space of 12 months."

The data found that there are 4,635,000 private homes in the UK that rose in value by more than £30,500, the average UK salary, in the past 12 months.

On a more local basis, homes in the South West are most likely to be earning more than the average salary in the region. In the past 12 months alone, 29% of homes in the region increased in value by more than the average regional salary, which currently stands at £29,000.

Homes in the South East are the second highest top earners compared to the average salary. 28% of properties increased in value by more than the average regional salary of £32,900 over the last 12 months.

London, which many may have expected to come top, comes third on the list, due to the higher than average salaries earned there. Nearly a quarter (24%) of homes in the capital went up by more than the average London salary of £37,300 in the past year.

Despite homes in the North and Midlands rising less in monetary terms than their Southern counterparts, the lower house prices in these regions and the pace of house price growth means a notable proportion of homes are still rising at a higher level than local salaries.

Nearly one in five homes (18%) of homes in the North West, 17% of homes in the East Midlands, 14% of homes in the West Midlands and one in ten homes (9%) in the North East have gone up in value by more than the average salaries in these areas in the past year. In Scotland, the figure is 9%, whilst in Wales it is 22%.

Home values in some commuter hotspots have also outperformed local salaries over the last 12 months. In Mole Valley, Surrey, more than half (54%) of homes increased more than the average local salary, and in St Albans, that figure stands at 46%.

The shift among some homeowners from urban to more rural living during the pandemic has also resulted in house prices rising faster than local salaries in more rural and coastal areas. In Hastings, East Sussex, 62% of homes increased in value more than the average salary in the area of £25,800 in the past year. The figure is 60% in Adur, also in Sussex. Meanwhile, Dorset saw 47% and the Cotswolds saw 46% of homes increase more than the average salary.

Andy Marshall, chief commercial officer at Zoopla, commented: “As our agent partners know better than anyone, there’s been strong demand from home buyers since the market reopened after the first lockdown in May last year, compounded by the search for space and the stamp duty holiday.

"The impact this has had on house prices means that one in five homes in the UK have risen in value by more than the equivalent of a years’ salary over the space of 12 months."

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