"Social crisis" materialising in London

27-Nov-2007

The continued discrepancy between house prices and average incomes seen in London is creating a "social crisis" in the capital, according to the National Housing Federation (NHF).

The federation has said that first time buyers now need annual incomes of more than £100,000 to get onto the first rung of the property ladder in a quarter of all London boroughs.

Part of the reason behind this is the fact that house prices have risen by 161 per cent over the past decade but wages by just 40 per cent over the same period, the NHF notes. As a result, the average home in London costs more than 13 times the average income.

Current levels of housing completions must be doubled over the next 20 years in order to deal with predicted population increases, while mortgage lenders are currently rarely willing to lend more than four times income, the study added.

"House prices in London have reached new highs, leaving thousands of first time buyers unable to get their foot on the ladder. London is now a city of two halves, as the gap between those able and unable to buy their own home grows," said London Housing Federation regional manager Olivia Powis.

"London to remain the great world city it is, we need more affordable homes, and we need them soon.

"Housing associations in London need adequate funding to meet and exceed the Mayor's target of delivering 50,000 affordable homes by 2011," Ms Powis added.

The average house price in London is now more than £300,000, according to figures from Halifax.

New mayoral proposal to help first time buyers in London.


New affordable housing deals announced

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