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Pay outpaces house prices in many areas

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

Edinburgh and 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 and house prices has widened dramatically in other areas.

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

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

This is a relatively narrow definition of “affordability” as it ignores issues such as falling mortgage rates and the decreasing proportion of disposable income that is spent on home loan repayments.

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

In Scotland, wages rose faster – with the current house price five 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 from 6.9 times earnings in 2007 to 5.7 times now.


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