Variations in house prices at local authority level can largely be attributed to resident earnings. A similar situation exists with private sector rents. Analysis of earnings from the Annual Survey of Hours and Earnings and private sector rents at local authority level shows that there is a relationship.
Areas with higher earnings have higher rent levels. Using the statistical measure of correlation indicates a positive correlation of 0.8, which is considered strong.
Urban areas where earnings are generally higher exhibit higher rent levels.
Of the top twenty areas, sixteen are London boroughs.
Rents as a percentage of median income range from 23.1% in Hartlepool to 93.8% in Kensington and Chelsea.
The figures for Cornwall gave an average rental of £998, with annual earnings of £28,210 (monthly = £2,351). Rent therefore equals 42.5% of monthly earnings. For comparison, rents equal 29.7% of earnings in Sunderland, despite the fact that earnings are rather similar!
Notes
Local authority areas vary in terms of population from large cities to smaller district councils in more rural areas.
Local authority data for England, Wales and areas in Scotland.
The private rent figures used are the average total for an area. This will be influenced by the composition of property sizes.
Earnings data is for one person. A household with two adults would therefore have a higher household income.
Earnings figures are for employment only. Some households will have higher earnings due to other sources – investment, property, while self-employment earnings tend to be lower.
Sources
Office for National Statistics, (2025), Annual Survey of Hours and Earnings, Resident earnings - Total Gross median.
Office for National Statistics, (January 2026), Private rent and house prices, UK: December, Statistical Bulletin. Data figure 8.
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