Debate Magazine

Ricardo's Law Of Rent (part 94)

Posted on the 28 April 2014 by Markwadsworth @Mark_Wadsworth

From Lloyds Banking Group:
Homeowners in local authorities with the largest falls in the unemployment rate have seen the value of their property rise by almost £136,000 over a decade, according to new research by Lloyds Bank.
The average house price in the ten local areas that recorded the largest falls in the unemployment rate in the decade to March 2014 rose by 68%, or £198,709, to £334,404. The unemployment rate in these areas fell by 1.3% during the period...
At the other end of the spectrum the top ten areas with the lowest house price performance and a higher unemployment rate are generally concentrated in Northern Ireland and outside southern England...
The top ten areas with the lowest price performance have an unemployment rate that is on average 2.2% higher now than in March 2004.

Well, duh.
It's not just that people with good jobs have more money to spend and some of that money goes on higher rent/house prices; it is also that people are prepared to pay more to live in areas with higher employment rates - the extra income justifies paying the extra rent.

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