The latest instalment of our weekly series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities.
It’s funny, isn’t it? Weeks and weeks I’ve had access to all this lovely data on British cities, yet it’s taken me seven of these things to get around to doing one on house prices. Hmm. Maybe I’m not well.
Anyway. This week’s big question isn’t, as it might first appear, which British city has the most expensive houses – that one’s bloody obvious. The real question is: where’s next?
Well, I won’t keep you in suspense. Here’s the top 10, as a bar chart.
London is ahead. Of course it is, there was never even half a moment where either one of us thought it could be otherwise.
But the capital isn’t as far ahead as one might perhaps expect: it’s slightly more expensive, but not an order of magnitude pricier. That, one presumes, reflects two things: the fact that the data here includes chunks of far-flung suburbia, as well as London proper; and the fact houses in a lot of other places are now ludicrously expensive, too.
Next in the list are Oxford and Cambridge. The ancient university towns are both London commuter hubs and also thriving employment centres in their own right. After that there’s a pretty steep drop off, but, while they’re less beautiful, two of the next three – Reading and Brighton – fit this profile too. So does Crawley, except for the “having a university” part. (It has an airport instead.) The recipe for high house prices in Britain today seems to be to combine a booming local economy with a fast train line to London.
The vast majority of the top 10 are London commuter towns, in fact. (A fair few of them are at the seaside, presumably because, well, people do like to be besides the seaside). The only exceptions are Bournemouth and Bristol. Everywhere else on the list is within the economic pull of London.
If we show the same data as a map…
…a familiar pattern emerges. It’s the south (there’s a shock), but more than that it’s the central south. The wealthiest part of Britain isn’t just “the south” (no Devon or Cornwall), or even “the south east” (no Essex, either): it’s the capital and the area immediately to its west.
There’s another way of thinking about house prices: how they compare to incomes. It’s no good having cheap housing, after all, if there are no jobs that pay well enough to get a mortgage.
So, let’s also look at the housing affordability ratio: that’s the ratio of average annual incomes to average house prices.
This time, the top 10 is suspiciously familiar – it’s the same 10 cities, all over again:
The order, though, has changed a bit. Topping the chart now is Oxford, where in 2014 house prices were a terrifying 16 times incomes. (Banks will raraely lend mortgages of more than 4.5 times salaries.) What’s more, the top three are much more tightly bunched. London’s house prices may be crazy; but relative to incomes, Oxford’s are crazier.
London, Oxford, Cambridge – other than elite universities, what else do the three cities of the “golden triangle” have in common?
Oh yes. That was it.
