‘Pay outpaces house prices’ in many areas

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More than half of Britain has seen wages rise faster than house prices inside last 10 years, research by a mortgage lender has suggested.

Edinburgh as well as also Birmingham are among the 54% of areas where pay has outpaced property prices since 2007, the Yorkshire Building Society found.

Yet the gap between wages as well as also house prices has widened dramatically in additional areas.

The building society suggested in which had accentuated a north-south divide.

Across London as well as also much of southern England, the idea has become “increasingly difficult for first-time buyers as well as also those wanting to move up the housing ladder”, said Andrew McPhillips, chief economist at the Yorkshire Building Society.

“However, the north of England, Wales as well as also Scotland present a different picture entirely, with many places more affordable than they were before the credit crunch,” he said.

“While some northern cities, such as Manchester, are less affordable than they were in 2007, in much of the north of England, Scotland as well as also Wales, the gap between earnings as well as also house prices is actually around a third of the average for London.”

The analysis compares earnings data for each area coming from the Office for National Statistics (ONS) with Land Registry house cost data at local authority level.

in which is actually a relatively narrow definition of “affordability” as the idea ignores issues such as falling mortgage rates as well as also the decreasing proportion of disposable income in which is actually spent on home loan repayments.

Overall, the Yorkshire concludes in which wage rises have effectively kept pace with increasing property prices in Britain compared with 10 years ago.

In England, house prices rose faster, with the typical home costing 8.2 times median average pre-tax earnings for just one full-time employee compared with 7.9 times in 2007.

In Scotland, wages rose faster – with the current house cost 5 times the size of typical average earnings in Scotland, compared with 6.2 times in 2007.

The same was true in Wales where the ratio has changed coming from 6.9 times earnings in 2007 to 5.7 times currently.

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Biggest improvements

Three areas of Scotland have seen the biggest shift in wages rising faster than house prices compared with 10 years ago, according to the analysis.

They include Inverclyde, where house prices are 3.67 times average full-time gross earnings inside area currently compared to 6.38 times a decade ago. The additional two biggest movers were North Ayrshire as well as also West Dunbartonshire.

At the additional end of the scale was the Three Rivers local authority area in Hertfordshire, which has seen house prices rise coming from 9.83 times typical full-time earnings in in which area in 2007 to 15.83 times currently.

The next two biggest movers in in which direction were the London borough of Haringey, where house prices are 17.5 times in which area’s typical earnings, as well as also the London borough of Westminster which sees the average home cost more than £1m, or 24 times average earnings there.

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