New study by conveyancing solicitors shows North Kesteven as having the biggest drop in property sales since 2008, despite annual income and house prices.
Researchers at Bird & Co have explored recently released ONS data to present a detailed overview of how these two factors compare over time to ascertain a measure of housing affordability. Examining ONS property sale figures alongside this, the statistics reveal how income and house prices have impacted house sales, if at all.
The analysis of the data from 2003-2023 shows North Kesteven has one of the smallest disparities between house price increase and income percentage change, suggesting residents in the area are more likely to be able to afford housing whilst maintaining a good quality of life.
This graph shows the percentage change in property sales, house prices and annual income in North Kesteven year on year, over the past 20 years:
Since 2009, the largest disparity between house price percentage change and income percentage change can be seen in 2020-21, perhaps unsurprisingly, as a result of a drop in employment during the pandemic and an increased demand for houses, ultimately pushing the two factors apart.
This larger disparity could also be due to the government introducing a Stamp Duty holiday in July 2020, which temporarily increased the tax threshold for residential properties, effectively reducing the tax burden for buyers and stimulating market activity.
To get a sense of affordability across all locations in the UK, Bird & Co worked out the percentage change in house prices from September 2003 to September 2023, and the same for income from March 2003 to March 2023, and found the difference between these figures. From this, the areas with the largest and smallest disparity between house price and income growth became apparent.
Alongside North Kesteven, the 10 locations with the smallest disparity, and therefore where wage growth is keeping relative pace with house prices, were:
Location
House Price % Difference – Income % Difference
Ribble Valley
-11.54%
East Devon
8.56%
North Kesteven
14.42%
Wyre Forest
15.83%
Newcastle upon Tyne
16.45%
Mid Devon
23.74%
South Staffordshire
26.63%
West Lancashire
28.86%
Blackpool
30.15%
Cornwall
30.24%
The results show a variety of locations across England and Wales that appear to have higher affordability.
The only area to present a unique case with a negative disparity was Ribble Valley in Lancashire, suggesting that wages have grown faster than house prices. This rare scenario can indicate an exceptionally affordable housing market, potentially attracting new residents and investment.
Daniel Chard, Partner at Bird & Co, says, “The findings reveal North Kesteven as one of the least affordable places to buy a home in the UK, which is encouraging news news for prospective buyers in the region.
“This study should inspire those looking to buy a home to consider the long-term relationship between income and house prices to better understand affordability.
“However, it’s evident that factors beyond affordability are holding people back from becoming homeowners. Even when house prices and incomes align closely, property sales remain somewhat unaffected.
“This could indicate a lack of suitable housing availability, property value fluctuations, current interest rates, and mortgage availability.
“Personal circumstances, such as job security and long-term financial planning, also play a significant role. We urge anyone looking to buy a home to consider these long-term factors to ensure a better quality of life after purchasing a home.”
If you are looking to buy a property in North Kesteven in 2024, and require a solicitor to get you started, Bird & Co can help. If you are planning to purchase, sell or remortgage your home, then get in touch with Bird & Co’s North Kesteven’s conveyancing solicitors by emailing enquiries@birdandco.co.uk.
