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Secured Loans > House prices in London have risen by 518% in the past 20 years
Cast your mind back to 1996.
Dolly the sheep is the first mammal to be cloned. Prince Charles and Princess Diana announce their divorce. England host the European Football Championships and, of course, the lads from Take That went their separate ways for the first time.
In London, the average worker earned approximately £22,000 per year. Prices were relatively steady in the housing market following the recession in 2008, and the average house cost around £79,000 – four times a person’s annual salary.
Fast forward to 2016 and things are significantly different. The average house price now stands at a whopping £488,908, a 518% increase from 1996, and first-time buyers can expect to pay a deposit of £96,000.
Perhaps even more shocking is the correlation between the house price increase and the average wage increase. A person working in the capital today earns approximately £36,000, which is an increase of just 66% from 1996. Compare that to the 518% increase in house prices and it’s easy to see the disparity in affordability.
Unsurprisingly, such a large rate of inflation over the past 20 years has impacted heavily on the city’s residents. In 2001, figures show that just 15% of Londoners rented their property, and the likelihood was that after a few years you’d be able to save up enough to afford a small flat.
These days, approximately one in three of the capital’s residents rents, with many believing that purchasing a house in the capital is getting further and further out of reach.
This has had a clear impact on London’s demographic: there is still a large influx of young professionals, but there are now more and more people in their 30s and 40s choosing to leave the capital in order to secure a more affordable property.
How long the prices can keep rising for, only time will tell. It’s certainly a good time for those residents of London who have managed to pay off most, if not all, of their mortgage.
Representative 22.93% APRC variable.
For a typical loan of £26,600 over 180 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £484.00. This includes a Product Fee of £2,660.00 (10% of the loan amount) and a Lending Fee* of £763.00, bringing the total repayable amount to £87,030.00. Annual Interest Rates range between 11.7% to 46.5% (variable). Maximum 50.00% APRC. *Lending Fee varies by country: England & Wales £763, Scotland £1,051, Northern Ireland: £1,736.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
