As an interesting little focus on how the current market is, we pulled this data from the popular Mouseprice website as we found it quite an insightful metric.
The table shows the current property values in AL1, the whole of the AL postcodes, and then nationally, and below that that average earnings in each area, and the ratio of price to earnings below that.
As the notes on the page tell us, the ratios measure the relative affordability of property in the area - the bottom figure is the price divided by the earnings, so in AL1 in St Albans which covers the majority of the town centre, the average salary is around £37,000 and the average property is worth 12.7 times the average salary earned in the area.
The interesting metrics come into play when we start to compare this to different areas. If you scroll further down we've used nearby Luton as a contrasting example as the postcodes are far enough away to be separate.
What's interesting is that while the average property price and the average earnings are much much lower, the ratio is not miles away from St Albans standing at 9.58 times the average salary. In Harpenden the figure skyrockets to 17.4 - the figure only really drops, as you might expect, when you move to more rural areas away from major links to London.
This data is updated quarterly and Mouseprice source their information from a company called Calnea Analytics.
Here is the St Albans chart:
AL1 (St. Albans) Price/earnings ratio
Average current value
£474,600£466,600£265,100
Average Earnings
£37,212£26,972£24,478
Price / Earnings
12.7517.3010.83
LU1 (Luton) Price/earnings ratio
Average current value
£185,100£215,800£265,100
Average Earnings
£19,315£20,584£24,478
Price / Earnings
9.5810.4810.83
And some more interesting data showing the highest turnover streets in the town, which might be useful for those looking to purchase in the area. What does this mean? It's the roads where people move to and apparently do not stay for long - this could mean it's not the greatest place to live, but it could also conversely mean that it is the road with the greatest increase in price over time allowing upward mobility.
Perhaps a good place to start door knocking if you're looking to buy;
Perhaps a good place to start door knocking if you're looking to buy;
As a quick aside to this, and by popular request, we dug around and found one of the lowest (not necessarily the absolute lowest) P/E ratio towns in England - you're going to get most bang for your buck if you live and work in Bradford, West Yorkshire where the Price to Earnings ratio sits at 4.2 - the lowest in the UK according to a 2014 article was Stirling in Scotland with a P/E Ratio of 3.3!
ReplyDeleteJust out of interest I looked up approximate salaries in Stirling independently of Mouseprices data, and they seem to be around £18,000 for retail and up to £40,000 for IT and software development. The average house price in Stirling is £164,747 - a detached property will cost approximately £370,000, Semi's come in at £185,000, Terraced at £145,000, and flats settle around £123,000.