The Office for National Statistics (ONS) has recently revealed in its latest figures just how insane the house price rise has been in London – and why the capital’s renters will be stuck there forever.
Not accounting for inflation, the latest figures show that the average house price in London has increased by 68% whilst Britain overall saw an average growth of less than half the capital’s rise at 32%.
London’s rents have increased by 23% since 2011, compared to an increase of 14% across the country, as the graph below, put together by City A.M., shows.
The ONS also revealed that rent rises, overall in Britain, had stayed in line with median earnings, which couldn’t be said for London. Since 2011, rents have been continuously outstripping wage growth. This means renters who tried, but couldn’t, get onto the housing ladder constantly had to fork out an even bigger part of their income in order to pay their rent.
However, not all is bad for London’s renters. House price growth in the city has seen a bit of a slowdown over the second half of the last year. One reason for this, apart from changes made to property law and legislation, may be that it’s a natural process.
People just can’t afford it anymore, therefore, naturally the price growth needs to slow down.
Those changes are especially noticeable in the top end of the market, mainly due to the increase in stamp duty investors have to pay since April 2016.
Whether any of this will affect the middle of the market is still unclear, and very unlikely. London’s more affordable boroughs are still experiencing a price hike, and will probably continue to do so for a bit longer, until a natural slowdown happens there too.
Until then, it will stay just as difficult for the capital’s renters to escape the overpriced market. Unless they’re moving somewhere else.