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House prices in county areas 10 times higher than earnings

House prices in rural areas are now 10 times higher than average annual earnings, according to a new analysis by the County Councils Network (CCN).

According to the CCN, last week’s Housing Price Index figures shows that in some shire counties the average house price was 14.5 times higher than average annual wages in December 2018.

The average house price in rural areas is now £270,923, up on £262,390 in 2017.

While average annual wages in the same areas are £27,878, which is £1,700 lower than the national average of £29,588.

Just nine out of the 27 county council areas have a ratio that is below the national average of 8.2 times higher than average earnings.

Not surprisingly, the counties with the largest house prices to yearly wage ratios are all in the South-East: Cambridgeshire (14.6), Surrey (14), Hertfordshire (12.8), Buckinghamshire (12.8), and West Sussex (12).

In each of these areas, the ratio has widened since 2016, when Oxford Economics did a similar survey for CCN.

In contrast, the top five urban areas outside London are: Southend (10.5), Bristol (9.6), Bournemouth (8.6) Portsmouth (7.3) and Southampton (7.1).

The CCN says a ‘fragmented’ planning system is holding back development in county areas, pushing up house prices.

And the problem is being Earlier this month, a report from the National Audit Office argued that the planning system is ‘underperforming’ in respect to the government’s housebuilding targets.  

‘We have long been concerned that house prices in county areas are becoming increasingly unaffordable, with millions of young people locked out of home ownership and the situation rapidly worsening,’ CCN housing spokesman, Cllr Philip Atkins.

‘Building a variety of homes, more quickly, with the right infrastructure to support development will help ease the affordability crisis that is spreading from London,’ he added.

‘The government’s drive to tackle this issue is welcome but planning reforms to date do not go far enough – bolder change is needed to deliver the homes the country desperately needs.’

‘To that end, we recommend that rural areas have the same planning powers that are currently only on offer to urban metro mayors, such as allowing them to prepare their own strategic plans, to help deliver more houses in England’s counties.

‘At the same time, we would encourage more ‘Housing Deals’ outside of city areas. A closer alignment of planning and co-ordinated infrastructure provision across a county-wide geography will enable us to overcome the current fragmented approach to the planning system and build more homes and genuinely sustainable communities,’ added Cllr Atkins.

 

Jamie Hailstone
Senior reporter - NewStart

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