London £750,000 neighbourhoods on the rise

Price boom: There are 106 wards in London with average prices at £750,000 or above
PA

The number of London neighbourhoods where average house prices top £750,000 has overtaken those where they are below £300,000 for the first time,

Soaring local property markets across the capital have dramatically worsened its chronic affordability crisis over the past five years with the £300,000 home rapidly becoming an endangered species, new analysis shows.

The new figures - from Savills estate agents using Land Registry data - show that just 103, or one in six, of London’s 628 electoral wards now have prices under the £300,000 threshold.

The vast majority of these of in east and south London, with only a tiny handful in west London, and none have average values below £200,000 - again for the first time.

By contrasts there are 106 wards at £750,000 or above, mainly in west, central or north London.

The £300,000 ceiling is seen as significant as it is at the outer limit of what is within reach for a young working couple on typical London wages.

In 2010, when David Cameron entered Downing Street, there were 365 London wards with prices below £300,000 - including 63 at £200,000 or less - easily more than half the total. This compared with just 40 above the £750,000 mark.

Just five years later after an explosion in values that has pulled the property ladder out of reach of thousands of young Londoners this has shrunk by two thirds while the total at £750,000 or more has more than doubled.

But over the same period wages in London have barely moved, making it harder and harder for buyers to raise the mortgage funding they need.

According to the Office for National Statistics the median salary has inched up only four per cent in five years to £28,392 while the average has actually fallen slightly - to £36,258 - probably because of lower City bonuses.

The growing “affordability gap” has been widened by a huge wave of investment money, much of it from Asia, that has fuelled demand for London property.

Yesterday housebuilder Telford Homes described its apartments in its new development such as The Liberty Building on the Isle of Dogs, where one bed flats start from £495,000, as “relatively affordable.”

It said that two thirds of the 68 apartments sold so far have gone to “international investors in Hong Kong and China.”

Lucian Cook, Savills head of residential research, said: “This analysis highlights the scale of house price growth over recent years and its recent shift to outer London.

"We’ve seen a significant fall in the number of locations that are affordable for aspiring home owners and a sharp rise in the number of locations where existing home owners have been able to build or store their housing equity.

“This growing gap between those with and without housing equity is one of the major challenges for policymakers.”

Paula Higgins, chief executive of the HomeOwners Alliance said: ”It’s shocking that Londoners are being pushed further and further out. The people that live and work in London make it such a great place to be but it is being turned into as dead city.”

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