Torbay Property News

News and views of property in English Riviera

Torquay Wages Outstrip House Price Growth by 16.19% since 2007

May 21, 2019 By Neil Tozer

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

As regular readers of my blog know, I always like to find out what has actually happened locally in Torquay. To talk of North and South is not specific enough for me. Therefore, to start, I looked at what has happened to salaries locally since 2007. Looking at the Office of National Statistics (ONS) data for Torbay Council, some interesting figures came out…

Salaries in Torbay have risen by 20.27% 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 18.63%) and nationally, an increase of 17.61%.

Next, I needed to find what had happened to property prices locally over the same time frame of 2007 and today. Net property values in Torbay are 4.08% higher than they were in late 2007 (not forgetting they did dip in 2008 and 2009). Therefore…

Salaries in Torbay have risen by 20.27% 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 18.63%) and nationally, an increase of 17.61%.

Next, I needed to find what had happened to property prices locally over the same time frame of 2007 and today. Net property values in Torbay are 4.08% higher than they were in late 2007 (not forgetting they did dip in 2008 and 2009). Therefore…

Wages in the Torquay area have increased at a higher rate than property values to the tune of 16.19% … meaning, Torquay is bucking the regional trend

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 Torquay landlords as they need to be aware of this when making their buy-to-let plans for the future. If more Torquay people are buying, then demand for Torquay rental properties will drop (and vice versa).

As I have discussed in a few articles in my blog recently, this issue of ‘property-affordability’ is a great bellwether to the future direction of the Torquay 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 simultaneously, meaning for many Torquay 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 Torquay tenants and decent law-abiding Torquay landlords (and indirectly owner occupier homeowners). Whatever has happened to salaries or property prices in Torquay in the last 10 (or 20) years … the demand for decent high-quality rental property keeps growing.

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)

Related

Filed Under: Local Interest Tagged With: #torbayproperty, torbay

Connect With Us!

Visit Us On TwitterVisit Us On FacebookVisit Us On LinkedinVisit Us On Youtube

About the Author

Hi and thank you for visiting this blog. I have been in the Torbay Property market since 2008, owning and running with my excellent colleagues, the Ridgewater Sales & Lettings in St Marychurch, Torquay as well as Preston, Paignton. I have always shared my thoughts on the local property market in Torbay with my landlords, but now I want to share with everyone in the town. On this blog, I will talk about what is happening in the town’s property market itself, even looking at specific streets or housing estates. At other times, I will post what I consider decent buy to let deals. Some will be on the market with me (as I also sell property), but others will be on the market with other agents in Torbay. I like to look at the whole of market and give you, what I consider the best investment opportunities. If you see a potential deal, and want a second opinion, without hesitation, email the Rightmove link to [email protected] .

I will always give you my honest opinion on the property and its investment potential. (both good and bad) .

Neil

Neil Tozer

Recent Posts

  • How Will Coronavirus Affect the Property Market in the UK?
  • 7 Tips For a Smooth House Move in Torbay
  • Torquay Homeowners Are Only Moving Every 13.5 Years (Part 2)
  • Torquay Home Owners Are Only Moving Every 13.5 Years (Part 1)
  • Torquay Wages Outstrip House Price Growth by 16.19% since 2007
Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy

Copyright© 2021

Torbay Property News