Newspaper article The Evening Standard (London, England)

London Housing Squeeze Hits Mr Average

Newspaper article The Evening Standard (London, England)

London Housing Squeeze Hits Mr Average

Article excerpt

Byline: ECONOMIC ANALYSIS Russell Lynch

THE UK's biggest listed landlord, Grainger, sees signs of a "recent moderating" of house price inflation in London and the South-East. Website Rightmove reports a second monthly fall in a row for asking prices in the capital. So is there hope for anybody who isn't earning a six-figure salary or benefiting from the Bank of Mum and Dad of getting on to the London ladder before they're drawing a pension? I wouldn't bet on it. The capital's market might be "moderating" but it's all relative when official figures are showing average increases of more than 20% a year. And that fall in asking prices means takes the average price of a property coming to the market in London to a mere snip yours for PS587,000.

There has been a slowdown at the most exclusive end of the London housing market this year. But research from HSBC's economists suggests a home is still well out of reach of most would-be buyers, who are likely to be the collateral damage of protecting the capital's status as a global investment destination. We earn more in London 27% on average according to the Office for National Statistics but that's not much good when house prices are growing at twice the rate of the rest of the country.

It's a simple case of supply and demand. London grew by an extra million people to 8.3 million in the decade to 2012 and it is expected to pass the 10 million mark by 2029. Meanwhile Mayor Boris Johnson has set a target of 42,000 homes a year to be built in the capital for the next 20 years but less than half that amount were completed last year. We're not building enough.

HSBC has looked back through the last four major booms in prices from the post-war period to the 'Barber boom' of the early Seventies though the Lawson boom to the most recent surge of the early noughties. …

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