House price increases in London continue to outpace the rest of the UK. Latest data from the Land Registry shows that prices rose by 10.9% in the year to April and by 2.3% in that month alone.
In some parts of London rises are even higher. Over 12 months prices went up in Newham by 17.2%, 16.3% in Enfield and 16% in Bromley and Harrow.
While estate agents or anyone selling up and leaving the capital may be rubbing their hands the rises add to the huge problem of affordability of homes for people in London.
Urbs has looked at the data on the ratio of house prices to earnings. Using figures from the Land Registry and the Annual Survey of Hours and Earnings the government produces an index of housing affordability. The house price to earnings ratio for England is 7.1. In London it is 57% higher at 11.1.
The index measures the median price of a home against the median level of earnings. (Median, for those not familiar with the term, is the midpoint in a set of numbers and is different from the average).
Every London borough is above the level for England as a whole, and there are some wide variations across the capital. The boroughs seeing the greatest house price inflation in this month’s Land Registry figures – Newham and Enfield – are at the lower end of the index. The eastern boroughs of Barking and Dagenham, Havering and Bexley have the lowest level in London.
The ratio for Kensington and Chelsea is more than twice the London level and nearly 4 times the national rate, underlining how property prices in the borough are out of line with the income of the majority of people who live there. The ratio is also high in central areas of Westminster, City and Camden, and in Hammersmith and Fulham in the west.