First-time buyers 'need £93,000 salary' to buy average home in London

A first-time buyer needs a staggering £93,000 salary to buy an average priced house in London, according to research published today by the National Housing Federation.

Home Truths London 2009, an annual survey, shows that:

• The average house price in the capital is £362,810, requiring gross annual income of £93,294 to get a 90% mortgage at 3.5 x salary
• The average income in London is £26,156
• London’s housing associations provided 10,634 new affordable homes in 2007/08 - over 50% of all homes built in London and a 16% rise from the previous year.

The top five London boroughs for average house prices are:

• Kensington & Chelsea £1,181,803 (requiring a salary of £303,892)
• Westminster £779,563 (£200,459)
• Camden £651,580 (£167,549)
• Hammersmith & Fulham £565,485 (£145,410)
• Richmond upon Thames £508,883 (£130,856)
• Barking & Dagenham is the ‘cheapest’ borough at £197,630 (£50,819).

Belinda Porich, head of London region at the Federation, said: “Even by London standards, these are astronomical prices and many people - especially young, first time buyers - can only dream of owning a home.

“Housing associations own and manage 380,000 affordable homes, housing more than one in every nine London households. Providing more affordable housing is part of the solution to the wider economic crisis. Even as public spending tightens, governments must remember this crucial fact. Everyone has a right to a home.”

Londoners also continue to suffer in the recession from overcrowding and huge waiting lists - made even worse by rising unemployment and repossessions:

• There were 353,130 households on social housing waiting lists in 2008, a rise of 6% on the previous year and equal to one in nine London families.
• Nearly 7% of households are overcrowded – more than 2.5 times the national rate and the highest proportion in the country.
• Last year more families were accepted as homeless in London than new social homes built.

Belinda Porich said: “Our largest G15 housing associations are working with boroughs on initiatives to tackle this modern-day scourge of overcrowding, which affects the Black and Minority Ethnic (BME) community in particular. We are happy to work with the Mayor who has said he wants to halve severe overcrowding by 2016.

“Overcrowding and the huge waiting lists show that governments must recognise the urgency of building new affordable housing and providing funding for the upgrading of existing homes.”

The full London Homes Truths booklet will be available on the Federation’s website www.housing.org.uk/london from 1200 GMT today.

House prices in Home Truths are based on complete annual figures for 2008 as published by the Department of Communities and Local Government from Land Registry data.