Only Londoners earning over £100,000 - three times the average London salary - can now afford a typical mortgage in the capital, a new report from the National Housing Federation says.
The report, London: Broken Market, Broken Dreams is a stark look at London’s housing crisis, with soaring housing costs highlighted as its biggest challenge. It reveals that the income needed to afford a typical 80 percent mortgage1 on an average London home was £108,500 – way above the average yearly wage of just £33,000.
It warns that the average house price in the capital has rocketed to over 14 times the average wage, driven by a lack of new homes being built and rising demand.
But, the National Housing Federation also found that the picture isn’t the same across London. For example, in Camden, now one of the most unaffordable boroughs, house prices are over 20 times the average wage, whereas at the other end of the scale house prices are 7.5 times the average wage in Barking and Dagenham.
As well as calling for more affordable homes to be built it highlights other pressing housing issues in the capital, including the need to improve poor quality homes and bring empty homes back in to use.
Dave Smith, external affairs manager for London at the National Housing Federation, said: “The fact that even well-paid professionals in the city can’t afford to buy a home and in many cases even struggle to pay their rent, should send alarm bells ringing.
“From employers struggling to attract new recruits to young people seeing their dreams of owning a home fade away and lower paid workers being priced out of living in the capital altogether, the effects of London’s housing crisis are being felt by millions of people every day.
“To keep London as a thriving city that’s admired around the world, its out of control housing costs must be tackled head on. We urgently need an ambitious, long term plan and for politicians from all sides to commit to ending the housing crisis within a generation.”