London properties earning more than homeowners

on Mar 18, 2015
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If you’re a homeowner in London, it’s quite possible that your home has earned more than you over the past two years. According to new research, the recovery in the housing market has led to average house prices in 73 out of 384 local authority districts increasing by more than average wages. Of these, 68 are based in London, the South East or the East.

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This may come as welcome news to many homeowners within these locales, but for anyone looking to invest in property, particularly as a first time buyer, it does cause a bit of a problem. Trying to get on the property ladder in prime locations with prices increasing at such a strong rate is almost impossible.
Hammersmith and Fulham have experienced the biggest differential, with the average house price increase over two years being just under £200,000 – a huge contrast to the average wage being just under £57,000. Wandsworth came in second place with a £102,760 difference between average house price and average salary.
Looking at the UK as a whole, the average wage taken home over the last two years amounts to just under £43,000, just over £8,500 more than the average house price increase over the same time period.
However, in the research done by Halifax, house prices were seen to have fallen by 0.3 percent nationally for the month of February, showing that much of the heat in the 2014 market has now burnt out. London was the only place in the UK where more house price declines occurred than increases for the month, according to the Royal Institution of Chartered Surveyors (RICS).
Also, figures from the Council of Mortgage Lenders (CML) show that loans advanced to first time buyers fell in January by 27 percent when compared to December 2014, while lending to landlords saw an increase of six percent.

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