This time last year I introduced a house valuation metric that went beyond the usual whole of United Kingdom or England and Wales discussion carried by the mainstream media. Instead I dissected both the salaries and house prices of England and Wales to prepare a valuation covering each County. It showed some interesting results including nearly a factor of four between the best valued and the most over valued County. Additionally, there was an obvious North and Wales to South divide when it came to house values. We are now 1 year on so today let’s look at what’s changed.
To Value the market we will stay with our previous definition which is a simple Price to Earnings Ratio (P/E). For House Prices we will stay with the Land Registry House Price Index. As a reminder this index uses repeat sales regression on houses which have been sold more than once to calculate an increase or decrease. As it analyses each house and compares the latest buying price to the previous buying price it is by definition mix adjusting its data also. This is then combined with a Geometric Mean price which was taken in April 2000 to calculate the index. It is seasonally adjusted and covers properties from England and Wales. It covers buyers using both cash and mortgages. We are using the latest published data which comes from March 2014. The analysis is arranged according to the Regions and County’s defined by the Land Registry and is shown in the Table below. Unlike the mainstream media we are going to call high house prices bad (the County with the highest house price is London at £414,490 and is shown in dark red) and low house prices good (the County with the lowest house price is Merthyr Tydfil at £59,041 and is dark green) with all other prices shaded between red and green depending on house price.
For Earnings we just move the dataset on one year and today are using the 2013 Annual Survey of Hours and Earnings (ASHE) which provides information about the levels, distribution and make-up of earnings and hours paid for employees within industries, occupations and regions in the UK. To ensure that our Earners and Houses are located within the same County we’ll stay using the Earnings by Place of Residence by Local Authority. This dataset presents weekly Earnings at both median (the middle point from each distribution) and mean (the average) levels which we have arranged into each Land Registry Region and County in the Table below. We then multiply the data by 52 weeks to convert it to an annual salary. We are calling low earnings bad (the lowest average earnings are £16,999 in Blackpool and are dark red) and high earnings good (the highest average earnings are £36,956 in Windsor and Maidenhead and are dark green) with all other earnings shaded between red and green depending on earnings.
To Value the market we will stay with our previous definition which is a simple Price to Earnings Ratio (P/E). For House Prices we will stay with the Land Registry House Price Index. As a reminder this index uses repeat sales regression on houses which have been sold more than once to calculate an increase or decrease. As it analyses each house and compares the latest buying price to the previous buying price it is by definition mix adjusting its data also. This is then combined with a Geometric Mean price which was taken in April 2000 to calculate the index. It is seasonally adjusted and covers properties from England and Wales. It covers buyers using both cash and mortgages. We are using the latest published data which comes from March 2014. The analysis is arranged according to the Regions and County’s defined by the Land Registry and is shown in the Table below. Unlike the mainstream media we are going to call high house prices bad (the County with the highest house price is London at £414,490 and is shown in dark red) and low house prices good (the County with the lowest house price is Merthyr Tydfil at £59,041 and is dark green) with all other prices shaded between red and green depending on house price.
For Earnings we just move the dataset on one year and today are using the 2013 Annual Survey of Hours and Earnings (ASHE) which provides information about the levels, distribution and make-up of earnings and hours paid for employees within industries, occupations and regions in the UK. To ensure that our Earners and Houses are located within the same County we’ll stay using the Earnings by Place of Residence by Local Authority. This dataset presents weekly Earnings at both median (the middle point from each distribution) and mean (the average) levels which we have arranged into each Land Registry Region and County in the Table below. We then multiply the data by 52 weeks to convert it to an annual salary. We are calling low earnings bad (the lowest average earnings are £16,999 in Blackpool and are dark red) and high earnings good (the highest average earnings are £36,956 in Windsor and Maidenhead and are dark green) with all other earnings shaded between red and green depending on earnings.
