A research conducted by Lloyds Bank has found out that the house prices in London are now nearly 12 times the average earnings of a Londoner. This makes London one of the top real estate markets where the house price to earnings ratio of house-buyers is among the highest in the world.
The average house price to earnings ratio in London has risen to 11.6 from 3.9 in the last 20 years. It means that the average earnings in London have not kept pace with the rising house prices. Thus, acquiring a quality home at an affordable price remains a challenge for thousands of Londoners. Besides, the gap between the demand and supply of quality housing is widening with many Londoners forced to become tenants.
In London, the Hackney witnessed the highest increase (702 per cent) in price of house from £75,569 in 1996 to £606,269 in 2016! This is followed by Westminster where houses prices have gone up from £190,438 (1996) to £1,424,388 (2016), an increase of 648 per cent. Southwark saw the third highest increase (626 per cent) in house prices in the last two decades.
London needs innovative schemes to help home-buyers, especially first-time home-buyers, to acquire homes at lower capital values. The involvement of the stakeholders concerned in making housing inclusive for all is of paramount importance.
The North East London Borough of Hackney has seen the steepest growth in house prices in the capital over the past 20 years, according to new research by Lloyds Bank