Indeed house prices in Hackney, Southwark and Lewisham are also higher than the average for London as a whole.
There are many areas where there is a strong relationship between high savings balances and high house prices. Five of the ten local districts with the largest average savings balances also feature in the ten areas with the highest average house prices in the country.
Residents of Kensington and Chelsea are not only some of the biggest savers – fourth highest average in the UK with an average customer balance of £9,6541 – but houses in the Royal Borough also command the highest average property price, at £634,637 (262% above the UK average of £175,483).
The other four areas that feature in both the top ten rankings for highest average savings balance and average house prices are Mole Valley (savings balance of £9,768 and average house price of £379,396), Chiltern (£9,567 and £413,802), Elmbridge (£9,217 and £409,606) and Richmond-upon-Thames (£9,116 and £428,466).
Residents in South Buckinghamshire and St. Albans are also amongst the ten areas with the highest savings balances in the country and have an average house price that is more than twice the national average.
Christchurch in Dorset and Derbyshire Dales are also amongst the top ten areas for savings balances and both have average house prices that are above both the national and regional averages. Shetland Islands is the only area in the national top ten for savings where the average house price is below the national (-25%) and regional (-7%) average.
The lowest average savings balances are held by those living in the London borough of Hackney (£3,224); however, the average house price in Hackney (£305,136) is 74% above the UK average and 6% above the Greater London average. Another London borough, Southwark, is also one of the ten areas with the lowest average savings balances, but has an average house price that is 86% above the UK average and 13% higher than the London average.
Only two of the ten areas in the country with the lowest average savings balances are also amongst the ten areas with the lowest average house prices: Hull (savings of £4,133 and an average house price of £100,550) and North Lanarkshire (£4,225 and £104,148).
There are, however, three areas that are in the bottom ten for average savings balances and have below national average house prices: Manchester, Glasgow and Knowsley. All three areas also have house prices that are below their regional averages. Overall, seven of the ten areas with the lowest savings balances in the country also have house prices that are below the regional average. (Table 2)
Nitesh Patel, economist at Halifax, comments:
“The relationship between savings balances and house prices is typically a strong one although there are some exceptions, mainly in London. Areas with high house prices tend to be populated by people with high savings balances. This is largely what you would expect given that areas with the highest savings and house prices tend to be ones where earnings are also relatively high. Several areas in London, however, have amongst the lowest savings in the country but house prices are above the national average. This could be because housing costs take up a relatively high proportion of income leaving limited scope for savings.
"Savings play an increasingly important part in the housing market, helping to provide the necessary funds to put down as a deposit when buying a home. Savings also play an significant role when planning for your financial future, so it is important to establish good savings habits as early as possible.”
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