The average home in Lewisham, Tower Hamlets and Hackney “earned” more in the past 12 months than a London police officer as house prices in the capital went through the roof.
Research published yesterday by the National Housing Federation compared house price rises in London boroughs with average salaries in key industries.
All Eastlondonlines boroughs saw an increase in house prices of over £25,000, with Hackney and Tower Hamlets being amongst the highest risers.
Hackney ranked fifth in terms of price rises in the capital, with the average increase in property value being £96,315, representing a 15 per cent increase in just one year.
This means that a home in the borough earned significantly more than the salary of a GP and more than all but the most highly-paid hospital consultants.
Philip Glanville, Hackney cabinet member for housing, said: “Hackney Council has pledged to deliver 3,000 new homes in the next four years, of which half will be for rent and shared ownership, and more than 600 of these homes will be built directly by the Council.”
“For those who wouldn’t qualify for a Council home at a social rent, but can’t afford rocketing private rents and ever-increasing mortgage deposits, the Council is also building 500 homes for shared ownership.”
Commenting on the report David Orr, chief executive of the National Housing Federation, said: “Only Londoners earning over £100,000 can now afford to buy a home here. The fact that even well-paid professionals in the city can’t afford to buy a home and in many cases even struggle to pay their rent, should send alarm bells ringing…”
“We need nurses, teachers, firefighters and plumbers in every city. Therefore we need to build homes that they can afford.”
Price rises were similarly notable in Lewisham, where an increase in value of nearly £48,000 represents over £10,000 more than the average nurse’s salary. Indeed nurses’ earnings over the past 12 months are eclipsed by house price rises in 20 London boroughs.
Nick Taylor, a 26-year-old nurse from south London, told the National Housing Federation: “As much as I would love to stay, I’ve planned my life around the fact I could never afford [to] settle down in London.”
In Tower Hamlets property values rose by over £60,000, though Mayor of Tower Hamlets Lutfur Rahman recently wrote in the Huffington Post that: “ownership is a distant pipe-dream”.
In criticising the Coalition’s housing policy Rahman said: “Large sections of the political establishment actively welcome soaring house prices. The government’s ‘Help to Buy’ scheme has been virtually useless.”
Croydon’s price rises are at the lower end of the ranking, with a near £30,000 increase. However, with the average price of a property in the borough being £257,000, almost half of the average figure in the capital, this is equivalent to a 12 per cent increase.
This is the latest in a series of reports that show a concerning future for the London housing market. In October the Labour-commissioned Lyons Report said that 200,000 extra homes would have to be built every year to keep up with demand.
Subsequently lobbying organisation Generation Rent’s report called for politicians to do more to protect the renters that now constitute a majority of citizens in most ELL parliamentary constituencies.