Housing affordability in London is at its best since peak unaffordability in 2016, and in line with 2014 levels. New data from shows that the average property price in the capital is now 13 times the average earnings, down from a high of 15 in 2016.
Most mainstream mortgage lenders will only offer a mortgage worth 4.5 times a borrower’s salary.
These latest figures also revealed that London is leading the country in terms of buyer demand, up 21 per cent year-on-year. However, while the demand is there, house prices remain subdued, and the London market has experienced an annual decrease of 1.1 per cent year-on-year.
This slight price reduction, when coupled with rising earnings, means that London’s affordability is on the rise as the house-price-to-earnings ratio is at its lowest since 2014.
While this is positive news for those wanting to get on the housing ladder, there is still the hurdle of mortgage rates, which have doubled since 2021, and are significantly higher than they were in 2014, when the Bank of England’s base rate was 0.5 per cent.