London houses now cost 14 times average earnings
The house price to earnings ratio in London is now over 14 times.
According to figures from Hometrack, the widening gap between supply and demand in the capital has pushed house prices up by 86 per cent since 2009.
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This means the ratio between home values and earnings is now 14.2x for the first time – the largest disparity in the country, and far above the national average of 6.5x.
Chancellor Philip Hammond revealed that he would be putting £3.15bn aside to help solve London's housing crisis, hoping to build 90,000 affordable homes by 2020-21.
Mark Boleat, policy chairman at Canada Corporation, said: "Too many workers in London face problems in finding affordable and suitable housing. Unless we take steps to tackle this problem then it simply drives workers away from London and benefits other leading financial centres, particularly those across Europe."
Cambridge and Oxford are also prohibitively expensive for many, with house price to earnings ratios of 13.8 times and 13.4 times respectively.
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To help build houses in other parts of the country, Hammond has set aside £2.3bn in a housing infrastructure fund to unlock land in high demand areas. He plans to deliver 100,000 homes with the fund.
New £2.3bn Housing Infrastructure Fund for infrastructure for up to 100,000 new homes in high demand areas #AutumnStatement pic.twitter.com/Bnp0LUYM5c
— HM Treasury (@hmtreasury) November 23, 2016
Richard Donnell, insight director at Hometrack, said: "The impetus for house price growth is shifting from the affordability constrained cities in southern England to cities in the midlands and the north of England.
"Regional cities have more attractive affordability levels and have significant potential upside for growth in the near term subject to the outlook for the economy.
"The Autumn Statement focused on the longer term challenges of addressing housing supply. This will have limited impact on the current profile of housing affordability, which will be dictated by market forces and households' expectations for jobs and the cost of borrowing."