NE9 (Gateshead) Price/earnings ratio
Average current value
Price / Earnings
Price to earnings ratios are effective measures of the relative affordability of property in a given area. The data displayed above shows the average current value of property (Price), divided by the average annual household income (Earnings). The result is displayed above. For example, if the average price of property was two hundred thousand and the average earnings were twenty thousand, the price earnings ratio would be displayed as 10.00x. In other words, the average property was worth ten times the average household income.
As one can imagine, there are many ways to measure average earnings and average prices. Depending on assumptions the results will be different. The most important thing when comparing the results between different areas is to ensure that the method of calculating average prices and earnings is consistent between the two areas you are comparing. Mouseprice ensure that the methodology used for each area is consistent.
Source: Calnea Analytics proprietary price data and earnings survey data - updated quarterly