Halifax: Savings account balances linked to house prices

There is a strong link between savings balances and house prices, it is claimed.

A strong link exists between the amount of money people have in their savings accounts and the house prices in their area.

That is the finding of research from Halifax, which discovered a small number of exceptions to this rule.

Generally, the greater the sum in a saving account, the higher the house prices in their locality tend to be.

But the London boroughs of Hackney, Newham, Lewisham and Southwark bucked this trend, as they have some of the country's lowest savings balances - at under £4,000 - but the typical cost of homes there are significantly above the national average.

Economist Nitesh Patel remarks: "Areas with high house prices tend to be populated by people with high savings balances. This is largely what you would expect."

The reason for the anomalies in the capital could be explained by the fact housing costs - such as mortgages - are so costly that borrowers just cannot afford to save as much money.

Mark Bower, managing director at online resource Money Maxim, recently suggested household bills could be cut if people adopt some simple habits, such as carrying out an energy check.

By Emma North