You are here: Home - Mortgages - Buy To Let - News -

London housing affordability hits new lows

Written by:
Prospective buyers in London face another blow, as data by Hometrack showed the house price to salary ratio has hit a record high.

Even following recent softness in the market, the average house price in London reached £496,000 in October, against average earnings of £34,200. This means the average house costs 14.5 times the average salary. Similar ratios were seen in Oxford and Cambridge (12.6 and 14.3 respectively).

The statistics show that affordability may be a greater problem than stamp duty, even after this month’s Budget changes.

Hometrack said the gap between earnings and house prices may lead London to underperform other areas round the country. The fastest growing cities were Manchester and Birmingham, which grew 7.9% and 7.4% respectively, overtaking Edinburgh, which had the fastest-rising prices last month. Data from Barclays Mortgages showed Ladywood in Birmingham saw the highest house price growth in the country, at 17%.

London prices are up 3% year-on-year, but this has mostly been driven by outer London, while inner London has remained flat.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week