One in four homes are earning more than their owners, with an increase in the number of homes outpacing their owners’ earnings, latest research from Halifax has shown.

According to the research, average house prices have increased by more than the average employees’ net earnings in more than a quarter (28%) of local authority districts across the UK – 108 out of 380.

Average house prices have increased by more than the average employee’s net earnings in 28% of UK local authority districts

The number of areas where house prices are outpacing earnings over the last two years has seen a significant rise, rising from 73 out of 384 districts a year ago to 108 out of 380 – a hike from 19% to 28%.

90% of these areas were in London, the south east and the east of England, with these regions making up 97 of the 108.

The widest gulf between rising property values and earnings was in the district of Three Rivers, Hertfordshire, where house prices increased by an average of £147,990 over the last two years, beating average take-home earnings in the area by £97,992. 

Rickmansworth in Hertfordshire, part of Three Rivers District Council, which showed the biggest gap between rising property values and earnings.

Top performers outside southern England were Warwick and South Northamptonshire, where house prices beat earnings by £24,723 and £14,837 respectively during 2014 and 2015. 

The research, based on data from Halifax’s own housing statistics and ONS data on average earnings, found that over the past five years (2011-2015), 35 local areas in the UK (9%) saw average house prices increase by more than total average pay.

The biggest differential was in Hammersmith and Fulham, where average property prices increased by £248,971, surpassing average take-home pay during the period by £108,653.

All 35 areas were in London, the south east and the east, and the top 10 performers were all in London.

And over the past decade, house prices increased by more than total pay in four areas across the UK: Brent (£11,760), Haringey (£8,255), Hammersmith & Fulham (£4,438) and Cambridge (£1,767). 

An atom of type quote lives here

Martin Ellis, housing economist at Halifax, said: “The housing market recovery over the last few years has led to substantial price rises in some areas of the country, particularly in London, the south east and the east of England.

“This has resulted in homes increasing in value by more than total take-home earnings for the average homeowner in many areas of the country. “Clearly, this is good news for some homeowners.

“However, it does make conditions tougher for those looking to buy their first home in such areas, with prices being pushed increasingly out of range for many young people.”