Even as the cost of acquiring a home in London keeps climbing, fresh data released by UK-based Hometrack has revealed that it costs 14 times of average earnings of a working professional buy a residential property.
The Hometrack Price Index for October indicates that the house price growth is holding steady at 8.4 per cent in 20 major cities of the UK, including London, Birmingham, Cambridge, Newcastle and Oxford. Most cities have price to earnings ratio in line with long run average and room for price growth, according to the Index.
The increase in the house prices is 86 per cent since 2009 with the demand for affordable homes outstripping supply. For first-time home buyers in London, it is still a dream to acquire a home in Europe’s financial capital. Research has indicated that even young working couples are not in a position to acquire a property owing to steep prices. At the same time, rents have gone up significantly across key markets in London.
The new initiatives to make housing affordable for all, as announced in the Autumn Statement by the Chancellor, offers some relief. Innovative housing models are needed to reduce the cost of acquiring a new home.
An 86% uplift in house prices since 2009 has pushed the price to earnings ratio in London over 14x, more than double the UK average of 6.5x