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Zoopla asks is your home ‘earning’ more than your salary?

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A fifth of homes in Britain have increased in value by more than the average salary in the past 12 months, a new report claims.

The average worker took home £30,500 in the past year, but 21 per cent of homes in Britain ‘earned’ more than this amount.

It is the latest evidence of a red-hot property market that has bounced back following a shutdown at the beginning of the pandemic, with the help of pent-up demand and a stamp duty holiday.

In Hastings, East Sussex, 62 per cent of homes increased in value more than the average local salary of £25,800 in the past year

In Hastings, East Sussex, 62 per cent of homes increased in value more than the average local salary of £25,800 in the past year

Homes in the South West are most likely to be earning more than the average salary in the region, according to property website Zoopla

Homes in the South West are most likely to be earning more than the average salary in the region, according to property website Zoopla 

The research by property website Zoopla revealed that the equivalent of 4.6million properties across the country have risen in value by more than the typical annual pay.

Zoopla compiled the research using its monthly house price estimates for every home in the country and ONS data. It found that homes in the South West are most likely to be earning more than the average salary in the region.

In the past 12 months, 29 per cent of homes in the region increased in value by more than the average regional salary, which currently stands at £29,000.

Homes in the South East are the second highest top earners compared to the average salary. In that region, 28 per cent of properties increased in value by more than the average regional salary of £32,900 in the past 12 months.

London may have sky-high property prices but comes third on the list due to its higher than average salaries.

Nearly a quarter of homes in the capital – at 2 per cent – went up by more than the average London salary of £37,300 in the past year.

‘The amount we earned on our flat is close to my salary’ says flatowner

Russell Maddison and his wife Hyun Kim - known as Helen - live in North London

Russell Maddison and his wife Hyun Kim – known as Helen – live in North London

Russell Maddison and his wife Hyun Kim – known as Helen – live in North London.

Their home in Hendon has increased in value by a similar amount to Russell’s salary.

Russell said: ‘When purchasing our first home, we wanted to be in an area with lots of greenery, and you simply don’t find that green open space in central London at an affordable price.

‘Hendon was the perfect compromise – right next to the green open space of the Welsh Harp reservoir, yet no more than half an hour on the train to work.

‘We were quite keen on moving into a regeneration area as it helped with our budget, and we did our research, looked at the plans and considered the potential of the whole area, not just what we could see at the time.

‘The decision paid off, because just three years later the one-bedroom flat we had bought for £202,000 was worth £320,000 – mainly due to the boost in prices caused by the regeneration of the area.

‘I’ve even worked out that the amount we earned on our apartment is close to my salary and this enabled us to purchase a larger two-bedroom apartment in the same development for £465,000.’

‘It’s a great feeling when you see the prices going up when you have bought at an early stage,’ he said. 

‘But you do have to have a careful eye. You need to be able to see ahead, look at the plans and what is there in the pipeline and try to visualise the end product. When you move in at the beginning of a development you have to be prepared for a bit of inconvenience along the way.’

Despite homes in the North and Midlands rising less in monetary terms than their Southern counterparts, the lower house prices in these regions and the pace of house price growth means a notable proportion of homes are still rising at a higher level than local salaries, according to Zoopla.

It said 18 per cent of homes in the North West, 17 per cent of homes in the East Midlands, 14 per cent of homes in the West Midlands, and 9 per cent in the North East have gone up in value by more than the average salaries in these areas in the past year.

In Scotland, the figure is 9 per cent, while in Wales it is 22 per cent.

Home values in some commuter hotspots have also outperformed local salaries during the past 12 months.

In Mole Valley, Surrey, 54 per cent of homes increased more than the average local salary and in St Albans, that figure stands at 46 per cent.

In Adur, Sussex, 60 per cent of homes increased in value more than the average local salary

In Adur, Sussex, 60 per cent of homes increased in value more than the average local salary

TOP 10 AREAS IN BRITAIN WHERE PROPERTIES HAVE INCREASED MORE IN THE PAST 12 MONTHS THAN THE AVERAGE SALARY FO THAT AREA
Area Average salary Average property value % of homes that have increased in value than average salary the area in past 12 months Number of homes that have increased in value more than average salary in the area in past 12 months
Hastings £25,800 £285,000 62% 18,000
Adur £26,700 £382,000 60% 14,000
Mole Valley £30,400 £649,000 54% 17,000
Rother £27,200 £358,000 51% 21,000
Dorset £28,000 £352,000 47% 71,000
St Albans £42,600 £663,000 46% 24,000
Cotswold £29,900 £442,000 46% 21,000
Sevenoaks £35,300 £501,000 45% 24,000
Bromley £41,900 £552,000 45% 51,000
South Lakeland £27,900 £295,000 45% 21,000
   Source: Zoopla       

Rural and coastal hotspots 

The shift among some homeowners from urban to more rural living during the pandemic has also resulted in house prices rising faster than local salaries in more rural and coastal areas.

In Hastings, East Sussex, an impressive 62 per cent of homes increased in value more than the average local salary of £25,800 in the past year.

The figure is also high in Adur, in Sussex, at 60 per cent. Dorset saw 47 per cent of homes increase in value by more than the average salary. The figure is 46 per cent in the Cotswolds.

Gráinne Gilmore, of Zoopla, said: ‘There has been strong demand from home buyers since the housing market reopened after the first lockdown in May last year.

‘This demand has been underpinned by people searching for more space, making a lifestyle change or climbing onto the first rung of the property ladder.

‘At the same time, the savings of up to £15,000 on offer as a result of the stamp duty holiday in the 12 months to July also encouraged people to make a move.

‘Hundreds of thousands of households have made the move into their new home over the last year, but activity has been so high, it has eroded the stock of homes for sale, which has put upward pressure on house prices, with values rising by up to 9 per cent in some parts of the country.

‘When this price rise is translated into pounds and pence, it means one in five homes have risen in value by more than the equivalent of a years’ earnings over the space of 12 months.  

PROPORTION OF HOMES THAT HAVE INCREASED IN VALUE IN THE PAST 12 MONTHS MORE THAN THE AVERAGE SALARY FOR THE REGION
Region Average salary Average property value % of homes that have increase in value more than average regional salary in past 12 months Number of homes that have increased in value more than average regional salary in past 12 months
South East £32,900 £379,000 28% 927,000
London £37,300 £521,000 24% 625,000
South West £29,000 £300,000 29% 620,000
Eastern £31,500 £333,000 23% 514,000
North West £27,800 £189,000 18% 474,000
Yorkshire and The Humber £28,700 £183,000 17% 321,000
East Midlands £28,100 £224,000 17% 294,000
West Midlands £30,200 £218,000 14% 289,000
Wales £28,200 £188,000 22% 256,000
Scotland £34,100 £168,000 9% 165,000
North East £33,700 £144,000 9% 88,000
UK £30,500 £265,000 21% 4,635,000
  Source: Zoopla       

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Cladding-hit flat owner to send repair bills to developer after floor collapses

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‘I’ll be sending the bill to the chief executive’: Cladding-hit flat owner hits out at developer after his floor collapses in latest building fiasco

  • Homeowner sees floor at his London flat collapse in latest building fiasco
  • We exclusively reveal the full extent of the damage – a hole that is 40cm by 30cm
  • The damage is the latest question about building work in flats across Britain
  • Many flats have already been hit by the cladding crisis and face huge repair bills 










A leaseholder who is already having to deal with expensive cladding issues has hit out at poor craftsmanship after the floor of his flat collapsed beneath his feet.

Liam Spender explained that he was at home at the weekend when he felt the floor give way.

‘I felt the floor go and moved quickly out of the way. I turned back and there was a dip in the carpet. I nearly fell through the floor,’ he said.

Leaseholder Liam Spender (pictured) has hit out at poor craftsmanship at his London home in Canary Wharf

Leaseholder Liam Spender (pictured) has hit out at poor craftsmanship at his London home in Canary Wharf

Mr Spender lifted the carpet at his London flat near Canary Wharf to reveal the full extent of the damage – a hole that is approximately 40cm by 30cm.

He explained that his flat is across two levels, meaning that the floor between is allowed to be made as it is – with chipboard and wooden joists – and does not need to include concrete. 

However, Mr Spender claimed that the sheets of chipboard were not adequately supported by the floor joists. 

The damaged floor is on a gallery above his bedroom. ‘It could have been a lot worse and I could have gone straight through,’ he said.

Taking to Twitter, Mr Spender explained how the floor was not adequate, saying: ‘There is only air between the floor boards and the room underneath.’

Mr Spender claimed that the chipboard floor was not adequately supported by the floor joists

Mr Spender claimed that the chipboard floor was not adequately supported by the floor joists

The flat owner revealed the full extent of the damage - a hole that is approximately 40cm by 30cm

The flat owner revealed the full extent of the damage – a hole that is approximately 40cm by 30cm

It is the latest challenge Mr Spender has at his building, as he already faces a bill for remediation works due to cladding issues.

‘I’m going to get the bill for fixing the mess on cladding. The broken floor is literally a step too far. 

He said: ‘I’m going to get the bill for fixing the mess on cladding. The broken floor is literally a step too far.

‘I have not had my bill for the cladding issues yet. But I’ll be sending the bill for the floor and the cladding – when it comes – marked for the attention of the chief executive and chairman of Berkeley homes.’

Since the Grenfell Tower fire in 2017, concerns about cladding have become a national issue.

Lenders have refused to provide finance on some types of cladding, leaving some flat owners trapped in unsafe homes that they are unable to sell.

Berkeley Group was approached for comment, but declined to comment. 

Mr Spender said the broken floor was 'a step too far' as he was already expecting a repair bill for cladding issues at his building

Mr Spender said the broken floor was ‘a step too far’ as he was already expecting a repair bill for cladding issues at his building

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How do you feel about the new carbon budgets?

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We want to hear your views on the proposed new carbon budgets which, the Government says, will change how people live and work. The proposed budgets, published by the Climate Change Advisory Council, will apply to every sector of the economy and will outline a limit for total emissions that can be released.

The first carbon budget, which will run from 2021 to 2025, will see emissions reduce by 4.8 per cent on average each year for five years. The second budget, which will run from 2026 to 2030, will see emissions reduce by 8.3 per cent on average each year for five years. The council says the budgets will require “transformational changes for society” but that failing to act would have “grave consequences”. Environmental campaigners say the budgets will provide a cleaner, healthier and safer future but some rural groups such as the Irish Farmers’ Association say they will have “serious repercussions”.

How do you feel about the new carbon budgets?

Now we’d like to hear your views: Do you support the budgets or are you against them; do they go too far or not far enough?

We will publish a selection of your responses online (If you are reading this on the Irish Times app, click here to access the form for submissions).

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House sales shoot up a THIRD in September amid fears of mortgage rate hike

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The number of homes bought and sold in Britain rose by two thirds in September compared to August, with experts believing buyers are seeking to get ahead of a potential rise in mortgage rates. 

There were nearly 161,000 property transactions in September on a seasonally-adjusted basis, a 67.5 per cent increase on the previous month, according to latest figures from HMRC. 

They also increased by 68 per cent compared to September 2020, and 63 per cent compared to the ‘normal’ market average in September 2017 to 2019.

The cost of a mortgage could be set to increase, if the Bank of England base rate rises

The cost of a mortgage could be set to increase, if the Bank of England base rate rises

Experts say the sharp rise was only partly a result of the Government’s stamp duty holiday, which has fuelled price growth of around £25,000 in the last year but finally ended on 30 September. 

It initially allowed buyers to save up to £15,000 in taxes as they did not need to pay stamp duty on the portion of their property purchase under £500,000. 

But in September, the tax break would have had a more subdued effect.

In England and Northern Ireland, it was tapered down between July and September so that buyers could only save £2,500.

And the holiday had already expired in Scotland and Wales, on 31 March and 30 June respectively. 

Given that the impact of the stamp duty holiday was lessening, some suggest that other factors have become more important in maintaining high levels of activity in the housing market. 

There are a number of things at play, according to Lawrence Bowles, senior research analyst at Savills.

‘There’s more to this activity than a stamp duty holiday: record-low mortgage rates, desire for more space, and a core of unmet pent up demand all continue to push up transaction volumes,’ he says. 

Although it is one of several reasons why the housing market remains hot, the desire for a cheap mortgage has become more of a pressing issue for buyers in recent days and weeks. 

This is because speculation about a rise in the Bank of England’s base rate has threatened an increase in the current super-low rates.

At the moment, rates are available as low as 0.89 per cent – but they are already rising. At its lowest, the cheapest fixed rate on the market was 0.84 per cent.

Major lenders including NatWest, HSBC and Barclays have all moved to increase rates on some mortgages, after months of sustained falls. 

With a base rate rise being predicted by some for December, experts are suggesting that the threat of mortgage rates going up is the ‘new stamp duty holiday’ and that the rush to complete sales before rates rise is now keeping the housing market buoyant.

Simon Bath, chief executive of technology company iPlace Global which created the property advice app Moveable, says: ‘We have reached another crossroads in which following the stamp duty holiday, there is another potential deadline for Brits to prepare for.

‘It seems likely that house prices will continue to rise before demand slows down, as Brits race to obtain lower mortgage rates.’

Rising costs: Those buying homes have seen the typical sale price increase by £5,000 in the last month alone, according to data from the property platform Rightmove

Rising costs: Those buying homes have seen the typical sale price increase by £5,000 in the last month alone, according to data from the property platform Rightmove 

Early statistics back his price rise theory up. According to Rightmove’s latest house price index, which covers the first half of October, the average house price jumped £5,000 compared to the previous month. 

In addition, every UK region broke asking price records for the first time since March 2007.

The property portal noted in its report: ‘The continued fast turnover of property for sale and a window of opportunity to buy before a potential interest rate rise seem to have overcome the final expiry of all stamp duty incentives and are keeping activity robust.’

This trend is keeping the market buoyant for now, but could it really lead to another buying frenzy? Iain McKenzie, chief executive of The Guild of Property Professionals, says so. 

‘With demand for properties still high, and a potential mortgage rate rise on the horizon, this could be the perfect storm to see another frenzy to buy, so long as the shortage of stock doesn’t continue,’ he says. 

There is also the simple fact that people who were trying to meet the September stamp duty deadline, but failed, are unlikely to abandon their purchases, and will continue to add to the totals over the coming months. 

But others are less sure about talk of another buying boom. With the base rate rise only tipped to be from 0.1 per cent to 0.25 per cent, the difference in people’s mortgage payments may only be a few pounds per month. 

For example, for someone with a £120,000, two-year fixed rate mortgage on a £200,000 home, the difference between a 0.89 per cent rate and a 1.04 per cent rate would be just over £8 a month, or just under £200 across the fixed period. 

Office for National Statistics data showing house price increases over the past 15 years

Office for National Statistics data showing house price increases over the past 15 years

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: ‘People will still move without stamp duty holidays and will continue to refinance their homes, whether mortgage rates are below 1 per cent or around 2 per cent.

‘Borrowers are keen to secure these historically-low mortgage rates but if the right property comes along, they are still likely to buy even if they have to pay say 15 basis points more and won’t qualify for a stamp duty holiday.’

But as the stamp duty holiday proved, the psychological impact of thinking you are saving money can be powerful, even when the actual cash saving is negligible. 

While buyers did indeed ‘save’ up to £15,000 in tax, house price rises during the stamp duty holiday were upwards of £20,000, eclipsing the actual saving.   

The true impact that the mooted rise in mortgage rates will have depends on myraid factors, including whether there is further clarity on if and when the base rate change might actually happen, and how mortgage lenders continue to respond to the situation. 

All eyes will be on the October transaction statistics and house price indices to see whether the market is remaining buoyant. 

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