Cost of housing in London at record 14 times average earnings
25 Nov 2016
The average cost of a home in London had risen over 14 times average earnings hitting the highest level on record an index had showed.
According to property analysts Hometrack, a lack of supply coupled with a strong demand for housing in London had pushed house prices up by 86 per cent since 2009.
The house price-to-earnings ratio in London was more than double that across the UK generally, where a buyer could expect to spend around six-and-a-half times their annual wage to purchase a home.
According to Hometrack's figures, the average house price in London was £482,800 - over 14 times the average annual wage at £33,720. Oxford and Cambridge too had house prices around 13 times local annual wages according to Hometrack's report.
Also strong house price growth in Bristol over the last two years meant a home there now cost over nine times the average local wage.
According to Richard Donnell, insight director at Hometrack, there had been a slowdown in house price growth in London as affordability had become more stretched.
London house prices were around 9 per cent higher than a year ago - the slowest annual growth seen in around three years.
The increase was much in excess of growth and meant prices were 14.2 times the average London wage packet of £33,720 a year.
The credit crisis did briefly hit prices in London but prices soon started trending upwards. The boom was slowing, though, according to Hometrack, with the annual rate of growth in the capital falling to 9.1 per cent, and the firm forecasting a further drop to ''low single digits'' in the next six to 12 months.
According to commentators, the figures highlighted how tough the housing market had become for prospective buyers in cities around the UK, with prices in all 20 tracked by Hometrack higher than their post-crash low.
