Homebuyers must pay a higher price to reside in the vicinity of Britainís most scenic locations, according to a new report from Lloyds Banking Group.
The nationís largest mortgage provider found that property-seekers have to part with a shade over £125,000 more than the surrounding countyís average, for a house in one of England or Walesí National Parks. On average, this lifts the price of this category of house by 58% compared with others in the surrounding regions.
The result of this overinflated house price growth is that citizens dwelling nearby Britainís National Parks are on the whole unable to afford homes within the parks themselves. According to Lloyds, the average price for a house in a National Park now stands at £342,534 – up from £251,269 ten years ago.
Stunted real wage growth in these areas constricts local inhabitants from purchasing homes with the Parks, as average earnings are now over 11 times less than average selling prices for houses in National Parks.
The highest average price paid for a home in a National Park is seen in New Forest, where houses go for a mean £516,479. This is double as much as houses in the surrounding area and 14 times more than average yearly earnings for local residents.
The second most expensive National Park to live in is the South Downs, with average house prices over 12 times as much as localís average annual earnings. Exmoor, Dartmoor and the Lake & Peak District(s) make up the remainder of National Parks harbouring average property prices over 10 times local average annual earnings.
Snowdonia offers the best value to property-seekers with a penchant for National Park residence, with a typical house in Snowdonia going for 173,779, a mere 5% above houses in neighbouring regions.
“The high quality of life associated with living in some of the country’s most beautiful areas attracts many homebuyers to our National Parks,” said Marc Page, Mortgages Director, Lloyds Bank. “They are also increasingly popular with those purchasing a second property. These factors mean that homes in National Parks typically trade at a significant premium to properties in surrounding areas.
“The disadvantage is that the resulting high property prices have made it very difficult for many of those living and working in such locations to afford to buy their own home. This situation has deteriorated in recent years as prices have risen more rapidly than earnings.”
Lloyds report comes in the wake of data released by economic forecasting group, EY Item club, which revealed that real wage growth can be expected to continue faltering beyond 2017, with middle-income earners hit hardest by this reality. This in turn sparks a domino effect which will yield lower consumer spending in the face of increased demand for housing of decent quality, which sorely needs to be made more affordable.
Hard working professionals ought to be able to nurture realistic ambitions for desirable housing in the vicinity of their work, whether that be in National Parks or elsewhere. Individuals have suffered from an enlarged household burden, resulting from the squeeze on family finances brought about by the great recession, in the face of zero real wage growth for too long. If the majority of these industrious individuals are unable to purchase good quality, local houses due to market fluctuations out of their control, they can be forgiven for feeling increasingly disenchanted with policymakers ñ especially when their plight is viewed in the context of data from respected analysts suggesting wage growth is unconceivable until at least 2018.
Martin Beck, top economic adviser to EY Item Club, lamented the situation regarding slow growth in annual earnings:
ìTotal household incomes have strengthened because more people are in work but individuals do not have extra money in their pockets:î he said.
ìReal wages are being held back by strong growth in the supply of workers and the fact that firms are facing increased non-wage costs, such as new pension schemes. We expect this trend to continue for several years to come and it will be mirrored with a slowdown in consumer spending growth.î
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