Rising property values widen gulf with Londoners’ wages

Philip Hammond: more austerity, and nothing to close the chasm between earnings and property values

While Philip Hammond makes his hour-long Budget speech today, the price of an average home in Croydon will have gone up by nearly £5.

Yet the Tory Chancellor is not expected to do anything which will really address the increasing unaffordability of housing in the capital, which is making it less a place to live for ordinary families, and remaining a target for property speculators from around the world.

A recent report in the Evening Standard showed that the average London home had gone up in value by £105 a day for the past five years – an increase in price of more than £38,000 per year.

But property prices are far out-pacing salaries, which over the same period have risen by just 54p per day, “pushing the gulf between average incomes and average property prices to its widest ever point”, the newspaper said.

According to research conducted by estate agents Savills, in December 2011 the average home in London cost £292,284. By 2017, that same property was on the market for £483,803.

Over the same period of Tory-led governments, average London salaries have stagnated at a few hundred pounds above £34,000 per year.

The paper went on to say: “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.”

This graph from Shelter illustrates where the real demand lies for housing in London today

House-hunters’ only real hope is that the over-heated property market cools off – which is something which appears to be happening, following last summer’s Brexit vote, in some of the richer neighbourhoods of London.

City AM has reported this week house price falls expected in six London boroughs in 2017, including Westminster, Kensington and Chelsea and Richmond, places where a 5 per cent fall in property prices could wipe £75,000 off a house’s value.

Also among the places where house prices are expected to fall, albeit on a more modest scale, is Sutton. Perhaps it is the fall-out from having all those rubbish-laden HGV lorries heading for the Beddington Lane incinerator?

Croydon is 14th in City AM‘s table of London boroughs’ property values, with prices expected to increase by 1 per cent in the coming year, seeing the average price increase from £379,500 to £383,295.

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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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