Want a home in central London? Better get that fifth job…
The average home in London’s prime areas is on track for setting you back a cool million pounds, according to property website Rightmove, putting them out of reach of all but the richest buyers – many of them foreigners who don’t even live there.
With an average yearly London salary of around 34,000 pounds you would need five full-time jobs to satisfy even the more generous lenders who offer mortgages worth five times income.
And that is after scrabbling together a minimum 10 percent deposit demanded by many banks, which would be 93,700 pounds based on the latest average house price data from Rightmove. Then there’s stamp duty (property tax) as well as legal fees.
As recently as August, a majority of economists polled by Reuters said Britain would see another house price bubble over the next five years.
They also concluded that London prices would rise around 6 percent a year – now surely too modest for 2013 at least.
“Some agents currently report there is a buying frenzy in parts of prime inner London,” said Miles Shipside, a director at Rightmove.
The figures are getting so eye-wateringly high that satirical news website The Daily Mash published an article saying London homes are only affordable to extraterrestrials, being sought after by galactic emperors now that they have become totally unaffordable to humans.
Even in the cheaper outer boroughs of London, the typical home is worth an astonishing 461,937 pounds – over 13 times a London salary.
Still, people desperate to get on the property ladder could still climb on through the government’s “Help to Buy” scheme offering to guarantee up to 15 percent of a mortgage under 600,000 pounds – itself inflating fears about another bubble.