Where in the UK is there room for house prices to rise?
One of my main hobbyhorses over the last couple of years has been how regional differences always seem to get overlooked in discussions of house prices and rental affordability.
I’m even starting to bore myself now, but buried on page 28 of a report on living standards from the Resolution Foundation, there’s a graph that I think tells an important story – and gives me the perfect excuse to bang on about it again.
(The whole report, by the way, is basically describing the “disappearing middle class” phenomenon. It’s enormously depressing, but worth reading.)
This graph shows – broken down by region – how average incomes, private rents and house prices have changed since 2006:
There are four regions of England where both house prices and private rents have risen faster than average earnings over the last ten years: London, the South East, the East and the South West. This is consistent with what we’re usually led to believe is the case for the whole country.
But in the Midlands and above, earnings growth has been faster than growth in house prices and private rents. That means that both renting and buying have become more affordable in large parts of the country.
And for Scotland, Wales and Northern Ireland there’s no rental data available, but average earnings have grown faster than house prices in every case.
So what does this mean?…