Soaring house prices in London could push the ‘best and brightest’ towards other European capital cities according to new research, which highlights the stark contrast in the sum required for a housing deposit across the region.
Figures from JLL show that aspiring homeowners in London need an average of 26 years to save a 10 per cent deposit* for a Central London one bedroom flat, up from 15 years just a decade ago. Despite the nominal wage in London growing by 15 per cent since 2005, the average price of London property has almost doubled, increasing by 92 per cent.
“The past decade has increasingly pushed the idea of home-ownership out of reach for many individuals in London,” said Philip Wedge-Bernal Residential Research EMEA Analyst at JLL.
“In 2006, London was considerably more affordable for aspiring buyers and in relative terms cheaper than both Paris and Rome by today’s comparison.
“The global recession has undoubtedly played a significant role in this trend, with domestic wages since the worldwide crash failing to keep pace with significant house price growth.”
Of 15 capital cities analysed, 10 would require less than half the time to save a 10 per cent deposit in comparison to London. The remaining four include Paris, Rome, Vienna and Stockholm.
While Stockholm has experienced significant price growth in recent years, aspiring buyers in the Swedish capital city would, on average, still spend 12 fewer years saving for a deposit. Paris requires the second longest period at just under 22 years.
Wedge-Bernal added: “London has for many years attracted the world’s best and brightest from all walks of life, however, this ever-growing affordability gap could soon jeopardise London’s status as the de-facto capital of the world, unless new homes are built in the Capital to combat this issue. The best and brightest may otherwise be tempted by the alternatives offered by other major European cities.”
UK residential research