Specialist mortgage platform Haysto reveals which areas across Great Britain pay the highest and lowest Council Tax proportionality

Amid the worst financial crisis in recent history, the disparity of living standards between the most affluent regions and those that aren’t so fortunate has been uncovered.

 

With millions affected by the recent financial crashes, furlough schemes and sky-rocketing unemployment rates, a new spike in council tax for many regions threatens to worsen this situation – as high as 7.5 percent in some areas.

 

Campaigners are currently pushing for a reform of the current council tax system as they suggest the lowest earners in the poorest areas are penalised greater.

 

This follows the government’s announcement that sees households across England and Wales will have to pay an additional £1.8 billion in council tax over the 2021/22 tax year – an average of £100 rise per household.

 

Specialist mortgage platform Haysto has conducted a study outlining what areas of Great Britain face the highest council tax rates in proportion to their annual income.

 

Westminster tops the charts, boasting an impressive Council Tax percentage rate of 1.4 percent – thanks to the region’s huge average annual salary that’s well clear of £60,000.

 

It may be surprising to see London Boroughs dominate the top 10. With annual salaries averaging well over £40,000, the top ten will generally never spend more than three percent of their salary on Council Tax, despite the average house price in London reaching almost £680,000.

 

Ranking Area Name Country Avg Council Tax per Dwelling (£) Avg Annual Pay (£) Council Tax as a Percentage of Annual Pay
1 Westminster England 892 63,791 1.40%
2 Wandsworth England 789 55,313 1.43%
3 Hammersmith and Fulham England 1,098 53,130 2.07%
4 Tower Hamlets England 1,156 49,500 2.34%
5 Southwark England 1,167 44,337 2.63%
6 Islington England 1,215 45,929 2.65%
7 Hackney England 1,020 38,419 2.65%
8 Greenwich England 1,149 43,261 2.66%
9 Camden England 1,419 51,778 2.74%
10 Lambeth England 1,246 44,733 2.79%

 

Scotland falls short of the top 10, with Na h-Eileanan Siar ranking 17th overall as residents have to pay 3.33 percent of their annual salary on Council Tax.

 

At the other end of the scale, it’s a different picture. The percentage Council Tax rate in proportion to annual income more than triples.

 

With a percentage Council Tax rate three times the average of London boroughs – and more than double that of major English cities like Birmingham and Manchester – it’s evident that income disparities are taking their toll in the less affluent areas of England and Wales.

 

The Yorkshire Dales district of Richmondshire in particular has its fiscal concerns. Worryingly, its citizens hand over nearly eight percent of their income to Council Tax on average, in addition to the already-rising cost of living.

 

Ranking Area Name Country Avg Council Tax per Dwelling (£) Avg Annual Pay (£) Council Tax as a Percentage of Annual Pay
355 Richmondshire England 1,864 23,750 7.85%
354 South Hams England 1,805 24,354 7.41%
353 Gwynedd Wales 1,745 24,221 7.20%
352 Powys Wales 1,731 24,244 7.14%
351 North Devon England 1,567 22,025 7.11%
350 East Devon England 1,777 25,533 6.96%
349 Teignbridge England 1,636 23,932 6.84%
348 Denbighshire Wales 1,643 24,041 6.83%
347 Ceredigion Wales 1,647 24,412 6.75%
346 Rutland England 2,050 30,402 6.74%
345 Melton England 1,648 24,573 6.71%

 

Interestingly, outside of London, it’s the northwest and northeast of England that offer some of the fairer Council Tax rates in relation to earnings.

 

Major cities in England like Manchester, Birmingham and Liverpool show they offer reasonable Council Tax rates, despite presenting an average income of around £28,000 a year.

 

Paying around one percent more of their average salary while earning only a little more than the average Welsh citizen (£26,805) shows these cities are getting a fairer deal.

 

These Council Tax percentages even rival that of the most affluent London boroughs, despite an average wage that’s more than half of the area.

 

Which parts of England (outside of London) pay the lowest council tax proportionately?
Area Name Council Tax as a Percentage of Average Annual Pay Overall Ranking
Manchester 3.56% 20th
Stoke-on-Trent 3.58% 22ⁿᵈ
Liverpool 3.65% 25th
Birmingham 3.66% 26th
Copeland 3.67% 27th

 

Paul Coss, Specialist Mortgage Broker and Co-Founder of Haysto commented:

“What’s shocking here is the disparity in Council Tax percentages paid out by people across the country. With people paying nearly 10 percent of their annual salary, on top of existing bills and a rising cost of living, it’s something that needs to be addressed.

 

“Many campaigners are pushing for the current Council Tax to be overhauled as it’s deemed outdated for using house prices from over 30 years ago. Instead, it should be based on today’s property values and homeowners’ ability to pay – especially amid such a crushing economic downturn”.

 

The complete data set can be viewed here.