London home prices and incomes drift even further apart
London boasts one of the most expensive housing markets in the world – and it’s only getting dearer, as low mortgage rates push prices skyward.
The average Londoner must now spend 14.2 times their annual gross salary of 33,720 pounds ($42,048) to buy a house. That is the highest level on record and more than double the ratio for the U.K. overall, according to data compiled by Hometrack and cited by Bloomberg.
Home prices in London have leapt 86 percent since 2009 due to low supply. The average price of a house in London is now 482,800 pounds.
“Overseas buyers looking for a safe haven, robust demand from domestic investors seeking protection from ultra low interest rates and huge demand from potential homeowners has caused prices to surge,” Richard Donnell, a director at Hometrack, said by telephone. “The jump is way in excess of the increase in peoples’ earnings, hence lots of people are simply priced out of London now.” [Bloomberg] –Christopher Cameron