As the government releases its Housing White Paper, prospective buyers will need to earn the a six-figure salary to afford a home in the UK’s capital.
- Prospective buyers need to earn £130,000 a year to afford a home in London
- By 2021 prospective buyers will need to save £2,300 per month to purchase the average London property
- Measures outlined in the government’s Housing White paper won’t solve London home ownership issues, but do aim to improve the quality of the private rented sector
The prospect of owning a home in inner London is unlikely to ever be a possibility for the vast majority of the city’s residents, according to a new report by the National Housing Federation.
Research reveals that in order to purchase the average London property by 2021, prospective buyers would need to save £2,300 a month, equating to more than the entire take home pay for the majority of London residents.
Due to high rents and incremental rises to the basic costs of living, the National Housing Federation estimates that prospective buyers would need to earn an annual household income of almost £130,000 in order to make home ownership a viable option.
The UK housing white paper released on February 7th outlines strategies the government plans to implement in a bid to fix the UK’s “broken housing market”. Unfortunately, the proposed measures are unlikely to have much impact on the capital’s property prices in the near future. However, a number of reforms planned within the private rental sector do aim to improve standards for the majority of London residents that choose and rely on the rental market
Recognising the need to cater for the growing rental population the government is pushing developers to provide significantly more affordable, purpose built-rental homes that raise standards of quality and offer long-term family friendly tenancies of three or more years. The government hopes these new regulations will help to provide more security and a real sense of home for tenants.
In addition, it is expected that by delivering more build-to-rent homes, investment interest will be transferred from buy-to-let, freeing up houses that would have previously been bought by investors and providing more homes at lower prices to those looking to buy.