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Where Houses 'cost' More Than London

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http://www.bbc.co.uk/news/business-28648704

London is the most expensive place to buy a home in the UK, right?

Not exactly.

House prices themselves may indeed be the highest in the capital, but there are other places in rural areas which are - relatively speaking - more expensive.

By taking local salaries into account, it is possible to map the affordability of homes for the people who live in those areas.

Under that affordability measure, there are no fewer than 62 English local authority areas which are pricier than London.

The research, from the National Housing Federation (NHF), suggests the current house price boom may have hit some people struggling to buy in the countryside even harder than those looking in towns.

60 years

In the capital the latest full-year figures show that the average wage is £39,920, while the average house price is about £400,000.

Prices are therefore 10 times greater than wages.

But in South Buckinghamshire, in towns like Amersham and Beaconsfield, the average home is worth 20 times as much as the annual local salary.

Outside the South East, the place where houses are least affordable is the Cotswolds, where they cost 19 times wages.

The countryside may be scenic, but that is little compensation when the average worker, putting a third of his or her salary into a mortgage, would need over 60 years to pay it off.

Other affordability hotspots include Chichester, Purbeck in Dorset, and South Hams in Devon. The most affordable rural location is Copeland, in West Cumbria.

"I shall be disappointed if I only get £550,000 for it," says Mike Golding, as he shows me into a two-bedroom, first-floor flat he is selling.

It has no garden, few proper windows, and no view to speak of.

But such prices are not excessive in Stow on the Wold, a pretty market town in the Cotswolds, where the undersupply of affordable housing is matched only by the oversupply of Barbour jackets, local organic brie and bow-windowed tea shops.

One such tea shop is run by Anna Wright and her mother.

She and her boyfriend have been looking for a house to buy, but, faced with prices like the above, they have given up looking in Stow.

"We have been priced out of the market," she says.

"You are privileged to grow up in the Cotswolds, but there's never an expectation of buying a house here," she tells me.

A few doors down, 21-year-old shop worker Nicola O'Driscoll is in the same position.

She has been forced to look for a flat in Cheltenham, no less than 18 miles away.

"It's really unfair. I feel like they don't want youngsters to live around here. Because there's no way they can," she says.

'Playgrounds'

Some 32% of Stow's population is already over the age of 65, double the national average.

"Stow is a honey pot for retirees," says Alun White of the town council, who warns that house prices are "ridiculously high", and "a very difficult problem".

The NHF is also concerned about the problem of second homes in places like Stow - bought up as weekend retreats by Londoners.

With many of those lying empty in the winter, local shops, pubs and transport services all suffer.

"A lot of rural communities are becoming playgrounds for the rich," says Monica Burns of the NHF.

"Local residents are left stranded with no buses, and accommodation they can't afford," she says.

The local authority says it is doing all it can to help.

Over the last four years Cotswold District Council has built 556 affordable homes in the area.

It has also given higher priority to local people on its housing list, and toughened the affordability criteria.

But in an area of such excessive prices, discounts are often too small to make a significant difference.

Let's face it Dave – this is the mother of all bubbles and when this pops it's going to be the mother of all crashes.

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Finally some acknowledgement that wages are a factor.

I posted the other day that I considered prices in rural Kent (where I spent a lot of time as a child) are more unaffordable than the ludicrously overpriced housing in Cambridge.

The reason being a 30 year old graduate could expect to earn £35k in Cambridge but in Kent would be lucky to earn £25k.

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Local people being priced out as usual?

This is half the problem. Waves of pressure for "low cost" housing, leading to waves of crap being built. Which in turn leads to more pressure and exclusivity on anything half-decent.

In some nice areas we have a history of Rural Apartheid: low-cost housing restricted to local people, but subsidised by a wider community most of whom could never dream of living anywhere so nice. Example: houses built around 1990 at Bradfield in the Peak District and restricted to "local" people, at the expense of poor communities in Northwest Sheffield.

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It is the ones outside the south east that surprise me the most. People who are buying houses in places like Amersham and Beaconsfield are doing so because it gives them an easy way to earn London wages, the local wages are largely irrelevant.

Sevenoaks always used to top this list, because it has virtually London-level house prices compared to the (very low) Kent-wide wage.

Some of the examples outside of the south east are pretty mind-blowing.

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There are areas of every city that have houses at London prices, there has got to be somewhere for Diversity Officers with the local Council on 100k per year to live.

I am often seen as a VI by some on here. But actually I am not and have nearly everything in cash, why would I put my eggs into the property market in Nottingham at these prices...the alternative is to live in one of the less desirable areas. Anything that is slightly good in a city is a million plus just because it resembles something in the country you can pick up for a third of the price.




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Edited by crashmonitor

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It is the ones outside the south east that surprise me the most. People who are buying houses in places like Amersham and Beaconsfield are doing so because it gives them an easy way to earn London wages, the local wages are largely irrelevant.

South bucks is cheap, you get access to a world class secondary school system for next nothing.

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If you want to try prices verses incomes, try the 50 or so shophouses in my local town, Koh Kong (smaller than some villages in UK) that sold for $180,000 a pop. The average wage in Koh Kong? That would be $120/month.

Do we win here?

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