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24/02/2016

Average Londoner needs a 266% pay rise to buy a home

Words: Laura Edgar
Camden

The average London home now costs £526,000 – 16 times the average Londoner’s salary of £33,000 a year, according to figures from a National Housing Federation (NHF) report.

Low supply, high prices and an average rent of £1,461 per month are listed as barriers to home ownership in the report.

Home Truths 2015/16: The Housing Market In London (pdf) states that a household requires an annual income of £120,248 to afford a mortgage in the capital, compared with an average salary of £32,838.

The report marks the launch of London’s housing associations campaign, 100 Affordable Homes for London, an offer to the city’s mayor to “tackle the current 151,000-home deficit”.

Homes Truths 2015/16 also suggests:

  • More than half of all London boroughs require an income of more than £100,000 to buy the average house;

  • There are 48,000 second homes in London. Kensington & Chelsea, Westminster, Camden and Tower Hamlets all have more than 5,000;

  • Kensington & Chelsea is the least affordable borough. Despite it having an average income of £59,000, homes are still 33 times incomes at £1.94 million on average; and

  • The most affordable boroughs were Bexley, Barking and Dagenham, Havering, Croydon and Redbridge, although homes still cost 11 times the average income.

The NHF said housing associations have built 40,000 homes for rent and sale during the last mayoralty. “If the mayor commits to offering the sector priority access to public land, housing associations can make a big contribution to building the 100,000 affordable homes needed over the term ahead.”

Speaking at the 100 Affordable Homes for London campaign launch, NHF chief executive David Orr said: “A secure and affordable home should be available to everyone. Living in London doesn’t have to mean living in cramped, overpriced, insecure accommodation; the housing crisis is not inevitable. Housing associations know how to tackle the crisis and provide quality homes which suit all Londoners.”

Referring to the housing commitments made by mayoral candidates Sadiq Khan and Zac Goldsmith, Orr said the NHF and housing associations know how to help.

“If the next mayor works with us to tackle the housing crisis at a London level, as we are working with the government to tackle it at a national level, we can go a long way towards solving the housing crisis.”

Homes Truth 2015/16 can be found here (pdf).

Image credit | iStock

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