London house prices reach ‘unaffordable’ levels – even for top earners
Even the richest people in London are being priced out of the property market as house prices reach record levels, the Office for National Statistics has found.
“In London, the average home was not affordable for any household income decile,” the statistics watchdog said in its latest Housing Purchase Affordability index, using 2023 data.
The ONS defines affordability as whether an average-priced home could be purchased with fewer than five years’ worth of household income. Even the top 10 per cent of Londoners by income would need six years to buy a home, the ONS found.
Only the top 10 per cent of high income households could afford to buy an averagely priced home of £298,000 in England, while the top 30 per cent and the top 40 per cent could afford to buy a home in Wales and Scotland, respectively.
The new data found that the average London house price was now equivalent to nearly 35 years of income for the bottom 10 per cent of households, compared to almost 10 years in the North East.
Meanwhile, those in the second decile in London have seen the number of years income needed to buy an average-priced home more than double since 1999, from 11 years to 24. It sits at eight in the North East.
The findings come after house prices around the country rose by 1.3 per cent in monthly terms in November to reach a new record of £298,083 pounds, according to Britain’s biggest mortgage lender Halifax.
Activity in the housing market has rebounded after the Bank of England began easing interest rates in August and lenders have cut back mortgage deals. However, campaign group Repossession Rescue Network said London had become a “housing dystopia where even the wealthiest deciles can barely keep up”.
“Tinkering around the edges with failed policies won’t fix this; we must build homes people can afford, or we’ll condemn entire generations to a sense of permanent property penury,” said Patricia McGirr, founder of the group.
The government is aiming to build 1.5m homes over the next five years, a significant increase from current levels.
Labour MP Chris Curtis, co-chair of the Labour Growth Group and a member of the Housing Select Committee said: “These figures demonstrate the staggering scale of our country’s housing crisis and underline the urgency of the task facing this government to end it.”
He added: “We need grow our economy so that rising pay packets mean it’s not just the privileged few who can afford to get on the housing ladder.
“Alongside this we need to be truly radical in reforming the broken planning system and explore innovative solutions to crowd private investment into building more affordable and social housing.”