Camden house prices are now a ‘staggering’ 12 times the average local wage
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Camden comes third in list of worst places for earnings to house prices in the whole country, as many struggle to save enough money for a deposit
House prices in Camden are now 12 times the average wage in the borough, according to research from eMoov. That’s a fraction below the average house price to wage ratio of 12.05 across London.
Russell Quirk, founder and CEO of eMoov.co.uk said: “When London is thrown into the spotlight in terms of the unaffordability of its property market, many are quick to highlight that the wages on offer are higher in the capital. However, this research shows that despite this, the gap between what hopeful London buyers are earning and what they are having to pay for a property is still way out of kilter and climbing.
Whilst the avearge wage in Camden is a respectable £60,300, the average house is priced at £832,191. A 10 per cent deposit requires £83,219 and as such the required wage of £166,438 leaves a deficit of -£106,138.
For the capital as a whole, the average house price is now £474,704 requiring a 10 per cent deposit of £47,470 whilst average incomes are £39,400. It follows that house hunters would need a wage of £94,941 to afford to buy a house, leaving a deficit of -£55,541.
The average house price in the UK as a whole is 6.05 times the average wage, half of the London average. Hackney came top of the list of wage to house price ratios with average house prices of £575,511, equating to 17.03 times the average wage in the area of £33,800. Brent and Haringey followed up in second and third place with 16.37 and 16.21 respectively.
Nine of the top ten areas with the worst deficit of average wage to average property prices are in the capital, with the exception of Purbeck, Dorset.
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Using the latest wage data from the Office of National Statistics and the Land Registry’s house price index, the hybrid estate agent also revealed that there is a gap of £6,111 between the current average wage in the UK and the wage required for a general mortgage approval of 4.5 times the salary.
Mr Quirk described the discrepency between the average wage and the wage that would be required to get a mortgage approved as “staggering”.
With the exception of South Bucks, the top ten worst areas for average wage to wage required for a mortgage approval are in London, where the gap between average wages and wage required for a mortgage approval is -£55,541. The gap in earnings was worst in Kensington and Chelsea (-£162,086), followed by Westminster (-£131,126).
Camden came in third place. Hackney placed fifth (-£81,302), Haringey seventh (-£77,813) and Islington ninth (-£74,530).
Mr Quirk, a former Brentwood councillor added: “It also shows that elsewhere around the nation there is almost a direct correlation between what a property goes for and the earnings on offer. But regardless of where you live and what you earn, there has been a serious unbalance between the escalating price of property and the stagnating wages available to UK buyers. This really needs to be addressed to help current and future UK buyers get a foot on the ladder and continue climbing it.”
The figures present a sobering reality for homeowners who face crippling wage to house price ratios in the capital and deposit prices to make eyes water. Without inherited money or property, or a generous loan from the Bank of Mum and Dad, many will continue to struggle to obtain a mortgage.
Average wage: £33,800
Average house price: £575,511
10% deposit: £57,551
Required wage: £115,102
House price/wage ratio: 17.03
Average wage: £34,700
Average house price: £562,564
10% deposit: £56,256
Required wage: £112,513
House price/wage ratio: 16.21
Average wage: £60,300
Average house price: £832,191
10% deposit: £83,219
Required wage: £166,438
House price/wage ratio: 13.80
Average wage: £48,700
Average house price: £616,152
10% deposit: £61,615
Required wage: £123,230
House price/wage ratio: 12.65