First time buyers frozen out in London

27 March 2006
Fewer than one in ten Londoners earns enough to buy an average-priced property in the capital, the London Housing Federation (LHF) has claimed.

New figures released last week by Rightmove.co.uk show that the average property price in London this month was £300,790.

That is 11.5 times the nationwide average individual salary of £26,000.

The LHF argues that the maximum a couple, each earning this amount, could currently borrow is around £182,000.

So, to borrow enough to buy a London home, a couple would need joint earnings of £82,000 per annum, a level achieved by fewer than ten per cent of Londoners.

Head of the LHF Berwyn Kinsey warned: "Some Londoners will applaud the news that house prices have broken the £300,000 barrier, but for many more this is evidence that the housing nightmare is getting worse.

"What’s worrying is that an increasingly large section of London’s population falls between two stools where housing is concerned. With affordable homes in desperately short supply, they are forced to make do in expensive private rented accommodation or take on more debt than they can afford to buy a home of their own. The only way to improve the situation is to build more affordable homes."

Figures from the Halifax also published last week put the average price of a detached house in London in excess of £500,000.

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