House prices, affordability and wages in Cornwall

The issue of house prices, their affordability and wages is a very important issue in Cornwall. This blog post is one of several I will be doing on the subject and will include comparisons of house prices in different Cornish settlements; their affordability compared the median and the house affordability ratio in the national content.

The issue of the affordability of a house in ratio to wages is large, but worryingly, it is getter larger as wages and house prices are not rising at the same, or even near the rate.

In 2000 an average house price in Cornwall could cost you £77,797.00. Compare this with the South West – £88,412 and for England and Wales – £83,373.  So a house in Cornwall was 12% less than the South West Average and 6.6% than the England and Wales average. Now lets look at the average house price in 2014, but before I do, I hope you are sitting down. In 2014 the average house price in Cornwall was £183,721. An increase of 136% in fourteen years.  The 2014 average for the South West is £181,471 and for England and Wales £173,228. For those interested the rise in the South West £105% and England and Wales 107%. (source Land Registry)

The house price increase is bad enough, but when you compare it with gross annual earnings you realise the affordability of a house in Cornwall is a major issue. In 2000 the average earnings (all work place employees) in Cornwall was £11,594. For the South West, £14,313 and for England and Wales, £15,952. This makes those in Cornwall paid 19% less than the South West and 27% less than England in Wales in 2000.

housewage1

The 2014 gross annual earnings for Cornwall was £17,344; an increase of 49.5% between the two periods – which is good news. The increase to £20,081 for the South West is less of an increase than Cornwall at 40.2% when you compare the 2001 and 2014 figures. For England and Wales the wage increase is to £22,201; and increase of 39% again less than Cornwall. However, and this is one of the points, Cornwall is still paid 28% less than the England and Wales average, which is a disgrace. (source for wages is NOMIS and ASHE)

Next, let’s look at the affordability ratio in Cornwall, the South West and in England and Wales.  In Cornwall the affordability ratio in Cornwall rose from 6.7 in 2000 to peak in 2004 at 12.5, then at 12.4 in 2007. The ratio then fell back but has been fairly stable at between 10.7 and 10.4 between 2007 and 2013. The ratio for 2014 has risen slightly to 10.6.

The South West saw an affordability rate of 6.2 in 2000 and 9 in 2014. For England Wales the ration was 5.2 in 2000 and 7.8 in 2014. It is clear the ratios have been consistently been higher in Cornwall than across England and Wales, and less affordable than both in the South West and England and Wales.ratio1

From this evidence is really highlights Cornwall has a major issue on the affordability of a house. Is this  issue one of economics and supply and demand? If one is greater than you have a greater impact? If there were more houses, would prices be cheaper? Have holiday lets and second homes added to the pressure of increased demand and therefore higher prices? The answer is probably, but to point a finger at one is a rather simplistic method and one that will be more than likely wrong. I believe it is several issues that add to the housing issue in Cornwall. However, I feel the main reason is wages and the historic lower pay Cornwall has. In previous blogs: Cornwall is one of the lowest paid areas in the UK  and Cornwall’s Average Wage there is a myth of low wages is in just one sector as from the evidence jobs in Cornwall are less well paid across the sectors it only reason why it seems is because those jobs are in Cornwall. Though, more research is needed on why this is.

Is this issue on of the chicken and the egg? Do we raise wages or lower house prices to make them more affordable?

 

Cornwall is one of the lowest paid areas in the UK

Following on from my previous blog on low pay in Cornwall, I now have further details on how Cornwall’s average wage is compared with other local authorities / areas. I knew Cornwall had the potential be amongst the lowest, but I did not realise just how close to the bottom  of the lowest average pay ‘league’ we would be (4th).

It is a small mercy that Cornwall is not at the bottom, this ‘honour’ goes to East Renfrewshire in Scotland, with the average pay of £15,389. The highest (and no real surprise) average wage is in the City of London; which is over three-times the lowest at £51,952. These figures* are for workplace and includes both full and part-time workers.

Why Cornwall is placed so low? This is due to a series of  – and obvious issues – issues including more low paying sectors and fewer higher paying sectors. There is strong evidence of lower pay across the sectors which impacts on Cornwall’s average pay. It is not just the case of one sector like tourism paying low wages, it is the same across all the main sectors are paid less in Cornwall. For example, Manufacturing at 73%, Construction 72%, Wholesale, retail and motors 81%, accommodation and food services 74%, Professional (legal, technical services) at 61% all pay less in Cornwall (percentage figures are against the UK average 100%).

Added to the issue is Cornwall also has higher levels of self employment, part-time etc.  Many part-timers are caught in the trap of wanting to work more hours, but they cannot due to a large sector of employment is seasonal.

The question is how do we address this?  In the meantime I will let you ponder and examine the table below on the average wages by LA /Area

LA / Area Average Pay Rank
East Renfrewshire £15,389 1 Lowest Average Pay
Torbay £16,555 2
Oldham £17,125 3
Shropshire £17,301 4
Cornwall £17,344 5
Blackpool £17,369 6
Northumberland £17,399 7
Angus £17,431 8
Gwynedd £17,482 9
Powys £17,536 10
Conwy £17,613 11
Herefordshire, County of £17,619 12
Dudley £17,632 13
Pembrokeshire £17,633 14
East Sussex £17,817 15
Tameside £17,841 16
Moray £17,896 17
Waltham Forest £17,984 18
Kirklees £17,994 19
St. Helens £18,027 20
Harrow £18,106 21
North East Lincolnshire £18,167 22
Inverclyde £18,174 23
Middlesbrough £18,205 24
Isle of Wight £18,261 25
Rochdale £18,306 26
Eilean Siar £18,341 27
Blackburn with Darwen £18,444 28
Walsall £18,473 29
Carmarthenshire £18,516 30
East Dunbartonshire £18,585 31
Wigan £18,619 32
Dumfries and Galloway £18,642 33
Bolton £18,681 34
Wirral £18,707 35
Ceredigion £18,746 36
Redcar and Cleveland £18,750 37
Sefton £18,779 38
Scottish Borders £18,848 39
Worcestershire £18,896 40
Merthyr Tydfil £18,903 41
The Vale of Glamorgan £18,913 42
Hartlepool £18,929 43
Rotherham £18,948 44
Blaenau Gwent £18,986 45
Rutland £18,990 46
Wolverhampton £19,017 47
Swansea £19,037 48
Norfolk £19,105 49
Rhondda, Cynon, Taff £19,151 50
Barnsley £19,206 51
Devon £19,208 52
Kingston upon Hull, City of £19,223 53
Lincolnshire £19,224 54
Dorset £19,281 55
North Yorkshire £19,298 56
East Ayrshire £19,307 57
East Riding of Yorkshire £19,313 58
Nottinghamshire £19,354 59
Sandwell £19,360 60
Somerset £19,383 61
Bournemouth £19,409 62
Staffordshire £19,426 63
Fife £19,460 64
Clackmannanshire £19,474 65
Monmouthshire £19,552 66
Derbyshire £19,610 67
Wiltshire £19,645 68
Doncaster £19,713 69
Newport £19,730 70
Suffolk £19,749 71
Lancashire £19,762 72
Bridgend £19,770 73
Bradford £19,801 74
Aberdeenshire £19,814 75
Cumbria £19,970 76
South Tyneside £20,024 77
Stockton-on-Tees £20,068 78
Cheshire West and Chester £20,086 79
York £20,114 80
Kent £20,154 81
Caerphilly £20,167 82
Stoke-on-Trent £20,190 83
Bath and North East Somerset £20,201 84
Leicestershire £20,231 85
County Durham £20,257 86
Stockport £20,273 87
Thurrock £20,305 88
South Gloucestershire £20,347 89
Bury £20,357 90
Highland £20,365 91
North Ayrshire £20,367 92
Sheffield £20,382 93
Denbighshire £20,387 94
South Lanarkshire £20,402 95
Perth and Kinross £20,453 96
Torfaen £20,490 97
Southend-on-Sea £20,575 98
Wakefield £20,673 99
Medway £20,697 100
Newcastle upon Tyne £20,707 101
Northamptonshire £20,783 102
Essex £20,790 103
North Tyneside £20,817 104
Gloucestershire £20,868 105
Central Bedfordshire £20,970 106
Telford and Wrekin £21,009 107
Poole £21,097 108
Argyll and Bute £21,101 109
Sunderland £21,120 110
West Lothian £21,123 111
Nottingham £21,126 112
Sutton £21,169 113
Calderdale £21,176 114
South Ayrshire £21,216 115
Bromley £21,265 116
North Somerset £21,280 117
Midlothian £21,312 118
Cheshire East £21,359 119
Anglesey £21,377 120
Trafford £21,402 121
Enfield £21,504 122
Brighton and Hove £21,510 123
Stirling £21,555 124
Birmingham £21,558 125
Lewisham £21,618 126
West Sussex £21,643 127
Darlington £21,676 128
Leicester £21,693 129
Bedford £21,734 130
Dundee City £21,791 131
North Lanarkshire £21,804 132
Renfrewshire £21,928 133
Luton £21,954 134
Cardiff £22,000 135
Plymouth £22,015 136
Warwickshire £22,017 137
Havering £22,120 138
Swindon £22,154 139
Gateshead £22,221 140
Bexley £22,358 141
Falkirk £22,412 142
Leeds £22,419 143
Glasgow City £22,638 144
Coventry £22,931 145
Brent £22,961 146
Port Talbot £22,963 147
Redbridge £22,996 148
Salford £23,004 149
Liverpool £23,025 150
North Lincolnshire £23,115 151
Halton £23,178 152
Warrington £23,184 153
Flintshire £23,203 154
Knowsley £23,204 155
Peterborough £23,299 156
Solihull £23,328 157
Southampton £23,386 158
Hertfordshire £23,418 159
Bristol, City of £23,468 160
Buckinghamshire £23,490 161
Merton £23,511 162
Newham £23,545 163
Portsmouth £23,594 164
Barnet £23,802 165
Hampshire £23,816 166
Ealing £24,338 167
Manchester £24,354 168
Surrey £24,471 169
Cambridgeshire £24,497 170
Haringey £24,538 171
Shetland Islands £24,752 172
Wandsworth £24,804 173
Greenwich £24,811 174
Croydon £24,852 175
Richmond upon Thames £24,984 176
Oxfordshire £25,110 177
Edinburgh, City of £25,543 178
Milton Keynes £25,639 179
Kingston upon Thames £25,738 180
Barking and Dagenham £26,025 181
Aberdeen City £26,384 182
Kensington and Chelsea £26,546 183
West Berkshire £26,548 184
Slough £26,625 185
Reading £27,094 186
Hackney £28,006 187
Derby £28,400 188
Hounslow £28,925 189
Wokingham £29,126 190
Hillingdon £29,165 191
Hammersmith and Fulham £30,167 192
Bracknell Forest £31,317 193
Southwark £31,545 194
Lambeth £31,778 195
Camden £32,596 196
Westminster £33,829 197
Islington £34,093 198
Tower Hamlets £44,380 199
City of London £51,952 200 Highest Average

 

  • Data from Nomis as of 22nd Dec 2014

Cornwall’s Average Wage

It will be of no surprise that the average wage in Cornwall is much less than the national average. Figures recently released* show the reality of how far behind Cornwall is against the national average. Taking the average wage in Cornwall in isolation on its own is bad enough, but if you add in the average house price and /or the average rent and then add in the other costs of living, it paints a bleak picture for Cornwall.

The latest earnings figures from the Annual Survey of Hours and Earnings show that the average annual workplace gross earnings of an employee in Cornwall were £17,344 in 2014, up by only 0.1%. If you expressed this as a percentage of the UK average, this represents 79% of that average. Compared to other Unitaries, Counties and London Boroughs in the UK, Cornwall ranked 196th out of 200. This is depressing.

The annual earnings in Cornwall split into gender is:

  • Earnings for males averaged £21,085, 78% of the UK average.  Up by 3.8% on 2013.
  • Earnings for females averaged £14,102, 82% of the UK average.  Down by 0.4% on 2013.
  • Full-time workers averaged £22,012, 81% of the UK total, part-time workers £8,633, 96% of the UK total.

The weekly and hourly wage in Cornwall:

  • Average weekly earnings totalled £320.9, 77% of the UK average, full-time £425.7 and part-time £150.4.
  • Average hourly earnings totalled £9.11, 79% of the UK average.

The data for Cornwall is available at the Parliamentary Constituency level. Here, Truro and Falmouth had the highest annual workplace earnings at £19,165 with South East Cornwall the lowest £15,304. Resident annual earnings equalled £18,354, 83% of the UK average. Lowest earnings were in St. Ives at £16,663 (76%) and highest in South East Cornwall at £20,812 (94%). The reason for the residential annual earning are different  because this included those people  who commute out of the Duchy. This is particularly the case in South East Cornwall.

Average Wage by Parliamentary Constituency

Average Wage by Parliamentary Constituency

The work place earning for the Parliamentary Constituencies are:

Cornwall: £17, 344 – 0.9%

  • Camborne and Redruth: £18,089 – 0.8% change from 2013
  • North Cornwall: £18,093 – 0.1% change from 2013
  • South East Cornwall: £15,304 – 6.6 change from 2013
  • St Austell and Newquay: £15,458 – minus 13.1 change from 2013
  • St Ives: £16,359 – 1.1% change from 2013
  • Truro and Falmouth: £19,165 – 6.6% change from 2013

United Kingdom: £22,0440.9% change from 2013; England: £22,343 – 0.8 % change from 2013

The Place of Resident earning are:

Cornwall: £18,354 – 0.4% change from 2013

  • Camborne and Redruth: £18,018 – minus 0.6 change from 2013
  • North Cornwall: £20,003 – 13.9% change from 2013
  • South East Cornwall: £20,812 – 7.4 change from 2013
  • St Austell and Newquay: £17,386  – minus 6.8% change from 2013
  • St Ives: £16,663 – 1.2% change from 2013
  • Truro and Falmouth: £20,163 – 4.5% change from 2013

United Kingdom: £22,044 – 0.9% change from 2013; England£22,343 – 0.8 change from 2013

It is no surprise the further West you go in Cornwall there is not a great deal of difference between the work place earnings and the place of resident earnings. However, In the East, there is a difference because people have the opportunity of working out of Cornwall like in Devon. Though, the wages in the East are clearly the lowest in the whole of Cornwall if you take the work place earnings in isolation.

Because of the scale of the difference between the national average and Cornwall, there will have to be a fundamental change on how people are paid in Cornwall. The Living Wage is one solution, but this could place pressure on small businesses who might take on less staff to off-set the extra costs of the Living Wage. Or prices of goods and services will have to increase to cover the costs of the Living Wage. Sadly, there is no simple solution, but one must still be found.

 

 

*Source: Office for National Statistics, Annual Survey of Hours and Earnings, 2014 Provisional Results, 19 November 2014 [All figures are gross and give the median figure not the mean as the former is deemed to more accurately represent the average earnings in an area]. Thanks also to the Community Intelligence Team at Cornwall Council