Monday, October 9, 2006

Is there no end in sight for increased London prices?

London house prices continue relentless march upwards - haart estate agents

The latest data from haart estate agents reveals that the average London house price has risen to its highest level yet, exceeding a quarter of a million pounds as the gap between supply and demand widens due to shortage of stock. The average price of a property increased by 1% in September to £250,907 from £248,580 in August, placing the increase in prices since the start of the year at just over 6%.

Posted by converted lurker @ 04:43 PM (543 views)
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7 thoughts on “Is there no end in sight for increased London prices?

  • Cstanhope707 says:

    Perhaps we should have a Windfall Tax on all those property owners who are making a killing thanks to the Tax Payer funded Olympics…

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  • Lets see…Average House price for buyers in London £250,907. Projected interest rate at 5.25% is £1097 per month. Median UK Wage (2004-2005) £22,500, DUAL income household £45,000, after tax at say 30% is £31,500 or £2,625 per month.
    That takes us 41.7% of takehome on mortgage interest payment, remainder disposable income, say £764 for each person per month, oops minus £100 each council tax (maybe a little less in Westminster)….£664, running a car each at £2000 a year is another £167 each a month…or other commuter transport..thats £497 each person remaining as disposable or £124 a week. Lunch out 5 days a week for a £5 a day..final disposable income £99 a week each, thats almost £19.80 a day!! Luxury!! We can worry about the £250k principle later……time for a holiday, now where did I put that credit card?

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  • Hyrax.. Great illustration of why the market is so unrealistic. What about repayment of capital ? Could always remortgage to pay for the holiday .

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  • Steady Bald Man

    Let’s not forget Hyrax’s couple probably had a lot of equity in the home they sold in order to buy the £250K.

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  • major flaws in your illustration Hyrax…
    1) you compare average London price with average UK wage. Wages in London are way higher than the UK as a whole (approx 40k, so nearer 80k dual income).
    2) Many couples in London do not own 1 car, let alone 1 each.
    3) Council tax paid on the property, not a tax on each person. £100 each would be a total bill of £2,400, double what most councils charge on a 250k property (I know, I live in one)
    4) an interest only mortgage payment of £1,097 is way less than the average rent in London of about £1,600 per month. Even a repayment mortgage on a 250k house is less than the average rent.

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  • tyrellcorporation says:

    Did you assume two wage earners in London just bring in £45k!!! A receptionist in Central London can be on £25k! Most professional couples I know who live/work in London earn a combined £80k minimum.

    Trouble is that London distorts the whole country’s housing market… I just can’t compete with Champagne Charlies – or even Magners Malcolms for that matter…

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  • When the london market takes off it really takes off but when it crashes it crashes the hardest. No sight of a crash in london any time soon though especially with the olympics coming up prices should continue to rise up till 2012. Maybe HPC everywhere in the UK apart from London?

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