One in five homes has “earned” more money than the UK average salary in the past 12 months, according to new research.
Over 4.6 million privately owned properties saw their value increase by more than £30,500, exceeding growth experienced in 2018 and 2019, data obtained by Zoopla has found.
Homes in the South West and South East were found to be most likely to outperform owners’ earnings, with an estimated 60 per cent of properties beating salaries in some coastal areas.
A desire for seaside homes and more living space during lockdown “eroded” available home stocks and placed upward pressure on prices, according to the property website.
Within individual regions, the value of private homes was also found to consistently race ahead of average incomes.
Homes in the South West were most likely to beat owners’ incomes, with 29 per cent increasing in value more than the regional average salary of £29,000.
June’s dip was the first in five months
Houses in the South East were the second highest earners with 28 per cent earning more than the average regional wage of £32,900 a year.
London finished third, with just under a quarter of homes (24 per cent) earning more than the capital’s average salary of £37,300 a year.
A rush to the coast during the pandemic has also seen prices rise faster than local salaries – especially in areas such as Hastings, East Sussex, where 62 per cent of homes rose more than the average salary of £25,800.
Nine per cent of Scottish homes out-earned the average salary of £34,100 a year, whilst little over a fifth (22 per cent) of homes earned more than the average income of £28,200 in Wales.
Even in the North and the Midlands, where properties are cheaper and earned less in monetary terms, many homes still outperformed local salaries.
Gráinne Gilmore, the head of research at Zoopla, said high demand for homes over the past year – inflated by the stamp duty holiday – had led to the surge in property values.
She 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 nine 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.”