When it comes to property prices in London, and London house prices, the amount of money that you have to pay to get on to the property ladder is enough to make your eyes water. There are many areas of London, and not all areas command the prices you see in Kensington and Chelsea or in Camden, but compared to the rest of the UK, even the “affordable” areas of London seem expensive.
Of course, there isn’t a level playing field between London and other parts of the country. The cost of living and average income figures are very different, so you can’t just look at the sales price and instantly make a comparison. It would be more sensible to consider the affordability of property in certain areas and to be honest; this doesn’t make pleasant reading for people looking to buy property in the English capital.
London house prices are moving away from average income
According to figures provided by Hometrack, property prices in London are 14.5 times the average earnings of a Londoner. Despite a lot of focus on the growth of London house prices slowing down, and in some areas London house prices falling, this figure has actually increased on last year. In 2016, London house prices were “only” 14 times the average level of income, but the gap has increased over the year.
It would be wrong to say that London was the only area experiencing this situation. In Cambridge, house prices are 14.3 times the price of average earnings and in Oxford, the ratio stands at 12.6%. Even in Bournemouth the average price of property is 10.1% times the average income. This is perhaps an indicator that London isn’t the only expensive place to stay in the United Kingdom but there is no denying that many people will wonder if they can afford to buy and live in property.
The London property market isn’t a single entity
Of course, it is wrong to look at the London property market as a single entity. Even in Inner London, there is a prime central market which is more expensive than the rest of the Inner London area. Add in Outer London and you have parts of the capital that are much more affordable than the headline figures would suggest. In recent times, the North East of the capital has been worth keeping an eye on, with some of these areas bucking the trend for falling prices in the capital.
In fact, the growth in prices in Outer London has ensured that the overall property prices in London are on the up, with Hometrack citing an increase of 3% over the year. The heart of the capital has seen property prices fall or remain flat but in areas like Clapton, prices have risen by 5%. This should remind buyers that there are many different areas and options in London, and it is worth speaking to an expert to find out more.
Anyone looking to buy in the London property market should arrange an appointment with Regent Property and we will be more than happy to offer guidance and advice.