Only people earning over £100,000 are able to afford a typical mortgage in London, says a new report.
The National Housing Federation's study 'London: Broken Market, Broken Dreams' argues that the income needed to afford a typical 80 per cent mortgage on an average London home is £108,500.
Figures from the Office for National Statistics out this morning show that annual house prices in London have risen 19.6 per cent.
In Camden, house prices are now more than 20 times the average wage, say the study's authors, whereas in Barking and Dagenham the figure is 7.5.
"The fact that even well-paid professionals in the city can’t afford to buy a home and in many cases even struggle to pay their rent, should send alarm bells ringing," said Dave Smith, external affairs manager for London at the National Housing Federation. "To keep London as a thriving city that’s admired around the world, its out of control housing costs must be tackled head on. We urgently need an ambitious, long term plan and for politicians from all sides to commit to ending the housing crisis within a generation."
Shelter’s chief executive, Campbell Robb, added: "Ever-rising house prices in the capital mean more young people and families stuck in the 'rent trap', without a hope of a settled home of their own. Just last week Shelter’s research showed that five million renters are unable to save anything towards a deposit from their monthly income."
Liam Bailey, Head of Residential Research at Knight Frank said the General Election next year would influence the direction of the housing market significantly, especially in central London, predicting that average UK house prices will rise 3.5 per cent in 2015.
"A North/South divide remains evident in the race back from the debris of the financial crash," said David Newnes, director of Reeds Rains and Your Move estate agents. "For six regions of the UK, average property prices achieved on completion are yet to match their pre-crisis score. The North has the furthest ground to travel, with average prices still 8.3 per cent below their housing boom high in March 2008.
"The path of the London property scene is best plotted on a different scale to the rest of the country. Overall, the capital has seen the strongest housing market recovery, with prices having now grown 47.3 per cent from their previous peak in February 2008. However, the rate of annual house price inflation in the capital eased in August, as we see growth relaxing into a slower tempo from the heady pulse earlier this year."Reuse content