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Horncastle Wages Outstrip House Price Growth by 10.04% since 2007

Article Simon Jory 2017-10-30
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Horncastle Wages Outstrip House Price Growth by 10.04% since 2007

A report by the Yorkshire Building Society stated 54% of the country has seen wages (salaries) rise faster than property prices over the last 10 years. The report said that in the Midlands and the North, salaries had outperformed property prices since 2007, whilst in other parts of the UK, especially in the South, the opposite has occurred, and property prices have outperformed salaries quite noticeably.

To talk of North and South is not specific enough. Looking at the Office of National Statistics (ONS) data for East Lindsey District Council since 2007, some interesting figures came out...

  East Lindsey East Midlands Nationally
2007 £19,874 £22,360 £23,920
2008 £20,244 £23,410 £24,960
2009 £21,752 £23,930 £25,506
2010 £21,772 £24,430 £26,088
2011 £22,625 £24,346 £26,010
2012 £22,422 £24,778 £26,432
2013 £24,393 £25,116 £26,931
2014 £24,726 £25,152 £27,097
2015 £24,029 £25,532 £27,508
2016 £23,873 £26,088 £28,132
Average Salary

Salaries in East Lindsey have risen by 20.12% since 2007 (although it's been a bit of a rollercoaster ride to get there!) - interesting when you compare that with what has happened to salaries regionally (an increase of 16.67%) and nationally, an increase of 17.61%.

Net property values in East Lindsey are 10.08% higher than they were in late 2007 (not forgetting they did dip in 2008 and 2009). Therefore...

Wages in the Horncastle area have increased at a higher rate than property values to the tune of 10.04%... meaning, Horncastle is in line with the regional trend

Change in property values

All this is important, as the relationship between salaries and property values is the basis on how affordable property is to first (and second, third etc.) time buyers. It is also vitally relevant for landlords as they need to be aware of this when making their buy-to-let plans for the future. If more Horncastle people are buying, then demand for Horncastle rental properties will drop, and vice versa.

The issue of 'property-affordability' is a great bellwether to the future direction of the Horncastle property market. Now of course, it isn't as simple as comparing salaries and property prices, as that measurement disregards issues such as low mortgage rates and the diminishing proportion of disposable income that is spent on mortgage repayments.

On the face of it, the change between 2007 and 2017 in terms of the 'property-affordability' hasn't been that great. However, look back another 10 years to 1997, and that tells a completely different story. Nationally, the affordability of property more than halved between 1997 and today. In 1997, house prices were on average 3.5 times workers' annual wages, whereas in 2016 workers could typically expect to spend around 7.7 times annual wages on purchasing a home.

The issue of a lack of homeownership has its roots in the 1980's and 1990's. It's quite hard as a tenant to pay your rent and save money for a deposit at the same time, meaning for many people, home ownership isn't a realistic goal. Earlier in the year, the Tories released proposals to combat the country's 'broken' housing market, setting out plans to make renting more affordable, while increasing the security of rental deals and threatening to bring tougher legal action to cases involving bad landlords.

This is all great news for tenants, decent law-abiding Horncastle landlords and indirectly owner occupier homeowners. Whatever has happened to salaries or property prices in Horncastle in the last 10 or 20 years, the demand for decent high-quality rental property keeps growing. If you want a chat about where the Horncastle property market is going - please read my other blog posts on this site or drop me note via email.

Sources:

  1. Stats on salaries for your Council are from Office of National Stats
  2. Stats on House prices from Land Registry
  3. 2007 stats from Office of National Stats

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Simon Jory

Simon Jory

Simon has been in Estate Agency for over 32 years and is a Fellow of the National Association of Estate Agents. Having working in all kinds of changing market conditions he is well placed to advise on how best to sell your home.

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Anne Pearce

Anne prides herself on working to the highest standards and believes everyone should receive the best possible customer service. With over 20 years' experience she will not miss and opportunity.

Dawn Bannister-Law

Dawn Bannister-Law

Prior to moving to Lincolnshire, Dawn was a valuer for more than 19 years in Bakewell in the Peak District. Dawn strongly believes buyers, sellers, landlords or tenants are all as important as each other

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