The average London home has been going up in value by £105 a day for five years.
New research shows that despite recession blues and political and economic uncertainty, property values have comfortably outpaced growth in London salaries, which since 2011 have risen by just 54p a day — pushing the gulf between average incomes and average property prices to its widest ever point.
The research found that in December 2011 the average home in London cost £292,284. Today that has soared to £483,803, according to analysis by Savills.
Meanwhile, average London salaries have inched upwards from £34,336 to £34,531.
This means the majority of London home owners have almost certainly earned less than their properties since 2011.
“The £105 per day increase in house prices over the past five years means the average home has earned £38,325 a year, against the average pre-tax salary of £34,531,” said Frances Clacy, research analyst at Savills and author of today’s report.
And, she pointed out, once tax has been taken into account, the gulf between average income and average property price only widens.
The study showed that the two boroughs where property prices have grown fastest, in cash terms, are Westminster and Kensington & Chelsea — by more than £200 per day since 2011. Prices in more than half of the capital’s boroughs have risen by more than £100 per day over the last five years.
Even in Barking & Dagenham, the worst-performing location, property values have increased by an average £69 every day.
The study provides a graphic illustration of just how difficult it is for Londoners to get on to the property ladder — particularly since, in the same period, rents have risen by 23 per cent, making it increasingly tough for Generation Rent to save for a deposit on a home of their own.
“Affordability levels have worsened for four consecutive years as average city house prices continue to rise more steeply than average wage growth,” said Andy Mason, Lloyds Bank mortgage products director.