How broken London’s house prices are – in one graph

How broken London’s house prices are – in one graph

The Office for National Statistics (ONS) has recently revealed in its latest figures just how insane the house price rise has been in London – and why the capital’s renters will be stuck there forever.

Not accounting for inflation, the latest figures show that the average house price in London has increased by 68% whilst Britain overall saw an average growth of less than half the capital’s rise at 32%.

London’s rents have increased by 23% since 2011, compared to an increase of 14% across the country, as the graph below, put together by City A.M., shows.

The ONS also revealed that rent rises, overall in Britain, had stayed in line with median earnings, which couldn’t be said for London. Since 2011, rents have been continuously outstripping wage growth. This means renters who tried, but couldn’t, get onto the housing ladder constantly had to fork out an even bigger part of their income in order to pay their rent.

However, not all is bad for London’s renters. House price growth in the city has seen a bit of a slowdown over the second half of the last year. One reason for this, apart from changes made to property law and legislation, may be that it’s a natural process.

People just can’t afford it anymore, therefore, naturally the price growth needs to slow down.

Those changes are especially noticeable in the top end of the market, mainly due to the increase in stamp duty investors have to pay since April 2016.

Could London house prices collapse?

Whether any of this will affect the middle of the market is still unclear, and very unlikely. London’s more affordable boroughs are still experiencing a price hike, and will probably continue to do so for a bit longer, until a natural slowdown happens there too.

Until then, it will stay just as difficult for the capital’s renters to escape the overpriced market. Unless they’re moving somewhere else.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

STAY AHEAD OF THE MARKET

Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT