London: Homes in London are less affordable than ever as low mortgage rates drive up prices by allowing buyers to borrow more.
It now costs the average Londoner 14.2 times their annual gross salary of 33,720 pounds ($42,048) to purchase a home.
The highest level on record and more than double the ratio for the UK as a whole, according to data compiled by Hometrack.
The annual rate of house-price growth in the capital was 9.1 percent in October, which is almost the lowest in three years, the property researcher said to reporters during an interaction.
Home prices in London have surged 86 percent since 2009 as the supply of new stock failed to meet demand from Britons and overseas investors, according to the information available from reliable data,
The spiraling values led Chancellor of the Exchequer Philip Hammond to set aside more than 3bn pounds on Wednesday to help construct more than 90,000 affordable homes in the UK capital by 2021.
Home prices in London have surged 86 percent since 2009 as the supply of new stock failed to meet demand from Britons and overseas investors.
The average price of a house in London is now 482,800 pounds, according to Hometrack.
“Overseas buyers looking for a safe haven, robust demand from domestic investors seeking protection from ultra low interest rates and huge demand from potential homeowners has caused prices to surge,” Richard Donnell, a director at Hometrack, said by telephone during an interaction
He also added that, “The jump is way in excess of the increase in peoples’ earnings, hence lots of people are simply priced out of London now.”
The researcher defines London as the 46 boroughs in and around the UK capital. Hometrack’s valuation model for houses and apartments is used by 17 of the top 20 UK lenders, according to the information available on firm’s website.
