Homes in the commuter town of St Albans are now as unaffordable as Chelsea after house prices shot up during the pandemic, new data has shown.
Research from Halifax, a high street bank, showed a standard property in the Hertfordshire town now costs 13.7 times the average salary for the area – the same as in Kensington and Chelsea. The only area less affordable was Westminster.
Families flocked to leafy commuter towns in search of more space and cheaper schooling and have pushed up property values in the quaint English market town. They rose from an average of £468,887 in 2020 to £530,200 in 202, Halifax said.
Graham Coton, of estate agents Cassidy and Tate, said there were around 15 to 20 buyers for each property coming to market in St Albans. He added: “People are bidding £50,000 above the asking price just to get a property. If you haven’t already sold your home, you won’t get a look in.”
Ian Hall*, has lived in St Albans for more than twenty years. He bought a central two-bedroom house in 2001 for £163,000 and sold it last year for almost four times that, at £630,000. He said: “All over St Albans, it feels like people are building loft conversions, cellars, garden offices – trying to get the absolute most out of the space.”
Across the commuter belt, the “race for space” has driven up house prices. Seven of the top ten most unaffordable places in Halifax’s data are popular commuter towns, including the Surrey towns of Elmbridge, Waverley and Guildford.
However, some London boroughs have become more affordable as city-dwellers fled the centre. Westminster recorded the biggest leap in affordability while Chelsea, where the average house price is £754,134, saw its affordability ratio drop from 14.6 in 2020 to 13.7 in 2022.
Mr Coton said St Albans’ highly reputed non-fee paying schools, such as Beaumont and Sadringham, its historic market centre and close connections to London, made it a favourite among prospective buyers, particularly young families.
“The catchment areas of those schools are also limited,” he said. “The effect on property prices hasn’t rippled out to local villages, making the property market in St Albans even hotter.”
Tom Bill, of Knight Frank, another agency, said house price growth in the commuter belt had shown no signs of slowing. “We believe the London property market will underperform the commuter belt over the next five years,” he added.
Across the UK, housing affordability is at its lowest level ever recorded. Since the start of the pandemic, while house prices have soared by 16.8pc, average wages have seen a megre 2.7pc increase.
Andrew Asaam, of Halifax, said the gap should narrow. “With interest rates on the rise as a means of combating inflation, it’s unlikely that house prices will continue to grow at the pace we’ve seen recently,”
North East Lincolnshire and Hull, were the most affordable areas according to Halifax’s data.