London property prices are already far out of reach of the average wage owners in many areas. Now, a report shows how house prices will look in the capital in 2030.
The figures from the report are startling, even when bearing in mind the current London property prices. The average price of a London home appears to be roughly £1 million by 2030. That’s pretty expensive by any means.
Of course, the average income will rise accordingly in this time. The problem is that wage growth is unlikely to match the asset price growth of London property. Currently, wage growth is extremely weak in the UK regardless of the economic upsurge over the past few years. It seems to have stabilised at around 2-3% per annum. In comparison, the average house price in London has been rising at around 10% per annum. Even though it has slowed recently, this trend shows no signs of abating. As a result, the gulf between wage earnings and house prices may be far greater by 2030. The average income may not be too dissimilar to the contemporary wage, while house prices may be far higher.
An important observation to make from this chart is that, by 2030, the areas in Greater London will have prices similar to current prices in more central regions, showing how the premium prices are moving outwards to the suburbs. Areas such as Hillingdon, Redbridge, Bromley, and Waltham Forest will all be tending towards the million pound mark.
It must be acknowledged that the methodology of this report is relatively weak. All the researchers did was a simple extraction of the 2000-2015 house price growth rate of 84% and applied it to 2016-2030. However, in reality, it is unlikely that house prices will grow at this exact level. Although it does give a rough estimate based on past trends, it should not be interpreted with too much vigour.
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