Your Haringey home earns 88 per cent more than you
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Homes in Haringey earned 88 per cent more than their occupants last year, but wages in Camden outstripped slowing house prices
If you live in London, your home is probably the biggest investment you have ever made, particularly if you live in Haringey.
Data from the Evening Standard and Santander has revealed that house prices grew 88 per cent more in the area including Highgate, Crouch End and Muswell Hill than the average local wage in 2016.
This makes it the third most profitable area for property investment across the capital, where four out of every five Londoners are currently earning less than the average property.
Average wages in Haringey are £31,873, but with house value growth of £59,900, homes are vastly outpacing the earning capacity of those who live in them.
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It’s a different story in Camden, however, with wages of £44,263 and an average house value growth of £39,584 equating to an earnings ratio of -11 per cent.
Kensington and Chelsea homes are making the least in comparison to wages with a ratio of -126 per cent as high average prices fail to pique the interest of buyers ‘waiting and seeing’ what happens whilst Brexit is negotiated and the economic future of the country is more clear.
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On average property in the capital increases in price by a shocking £127 a day, more than most wage increases in a year.
Wages in London were outpaced by house prices by 25 per cent in the last year. The average wage in London is £37,114 whilst average growth in house values between 2015 and 2016 was £46,370.
Elsewhere in the UK, homes earned 36 per cent less than average salaries on the whole.
Over a five year period, the picture changes again. The average annual wage between 2011 and 2016 was £49,387 in Camden whilst house value growth reached £54,526, equating to homes earning 10 per cent more than their occupants. In Hackney, homes earned 39 per cent more, and in Brent 38 per cent more. Haringey followed up with 34 per cent.
House prices have risen 88 per cent in the last decade, whilst wages have only increased by 7 per cent meaning the gap between real wages and the cost to purchase a home has increased starkly.
With low interest rates trying wooing new buyers to mortgage products, any increase in interest will no doubt leave the market increasingly vulnerable to homeowners defaulting on their repayments.
Miguel Sard, managing director of mortgages at Santander UK, said: “Property owners in London have benefited from strong price growth over recent years, underlining how valuable an investment it can be to get on the housing ladder in the capital.
“This offers a powerful incentive for those who are yet to buy a property, and encouragingly, market figures suggest that more loans are now going to first-time buyers than at any time in the past decade.”
Whether it offers an incentive for first time buyers with prices sky high and outpacing average earnings is questionable, but the report is undoubtedly good news for those living in up and coming areas like Haringey where those already in homes are seeing good returns on the initial investment.