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CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Sunday, 19 March 2017

London affordability worsens

Record (un)affordability

The cost of an average UK house has increased by 259 per cent since 2002.

Over the same time period, earnings have only increased by 68 per cent. 

As a result UK house price to earnings ratios as measured by for the Office for National Statistics (ONS) are at their least attractive level ever. 

Across England and Wales the average ratio is now 7.6 times earnings, up from 3.6 times in 1997.

But the real pain continues to be felt in perenially undersupplied London, where the ratio has ballooned to 12 times workplace-based earnings. 

The least affordable borough was Kensington & Chelsea, where the ratio is now 38.5 times annual earnings.

Of the half dozen local authority districts with the sharpest increase, all were in the capital city.

British home ownership has now fallen from 71 per cent at the 2003 peak to below 63 per cent.