THE so-called divide in wealth between the impoverished North and prosperous South is unfounded, bankers say.

In a study of incomes and the cost of living, nearly half of the fifty wealthiest areas in the country are north of a line drawn between the Severn and The Wash.

The study, by Barclays Bank, combined salaries and cost of living information to establish the real value of disposable incomes across the regions.

Salaries in some areas were estimated to be worth £10,000 more than their actual value because cheaper prices meant that money went further.

Although central areas of London topped the poll, Tatton in Cheshire, and Sheffield, Hallam, in South Yorkshire, are considered the third and fourth wealthiest localities, after adjustments are made for their cheaper cost of living.

Twenty-four areas in the North of England and Wales were among the top 50 wealthiest areas. Daventry in the Midlands, Rushcliffe, near Nottingham, Hexham, in the North-East, and cities such as Leeds and Newcastle upon Tyne join traditionally well-heeled regions of London and the South East in the list.

The “real” local incomes were calculated by adjusting the average gross income with a deduction appropriate to the cost of living in each area to give a guide to the purchasing power of salary.

Prices in London, considered to be the highest in the country, were the base rate for cost of living, but Kensington and Chelsea and the Cities of London and Westminister, with average individual gross incomes of £50,438 and £41,868, were still the wealthiest areas.

In Tatton, the average gross income is £32,763. But this was considered to be worth £41,466 because of the cheaper cost of living.

There would have been more northern areas in the top 50, the researchers said, had recent increases in house prices in the North West and Yorkshire not pushed up the cost of living in those regions relative to the rest of the country.

Mark Till, of Barclays Premier Banking, said: “Simply looking at earnings would tell you that it is London and the South East that is paved with gold. If the cost of living is factored into the equation to give a more realistic measure of purchasing power, the wealth map of England and Wales changes dramatically.

“With almost half of the top 50 areas in the north, the longheld belief that you need to live in London and the South East to earn a good living is blown away.”

Other areas outside London and the South East in the top ten wealthiest places after salary adjustments were Sheffield Hallam — where salaries were equivalent to £39,697; the Cotswolds at £38,295; Altringham and Sale, Cheshire, and Leeds North East, both with real incomes of £37,000.

Macclesfield, Harrogate and Knaresborough, Hexham, and Haltemprice and Howden in East Yorkshire all made it into the top 20 places with the best standard of living. They were joined by areas such as Esher and Walton, and southwest Surrey.

Research in October showed that the North-South divide in the housing market had narrowed to its lowest level in eight years. The Halifax said that prices in the South were 1.58 times higher than in the North, compared with twice as much in 2002.

While property prices in parts of the South fell between July and September, in areas of Scotland and Wales the value of properties soared by a third.

THE WEALTH MAP

Average income adjusted for cost of living

1 Kensington & Chelsea £50,438
2 Cities of London & Westminster £41,868
3 Tatton £41,466
4 Sheffield Hallam £39,697
5 Hampstead & Highgate £39,567
6 Cotswold £38,295
7 Beaconsfield £38,102
8 Leeds North East £37,931
9 Altrincham & Sale West £37,440
10 Richmond Park, London £37,203
11 Macclesfield £37,085
12 Esher & Walton £36,975
13 Mole Valley £36,964
14 Surrey £36,705
15 Stratford-on-Avon £35,873
16 Harrogate & Knaresborough £35,869
17 Hexham £35,833
18 W Derbyshire £35,471
19 W Midlands, Warwick and Leamington £35,212
20 Haltemprice & Howden £35,209

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