Buyers need an income approaching £800,000 to afford a home in Britain’s most exclusive streets, according to new research.
The figures come from London lettings and estate agent, Benham Reeves, and make clear that the vast majority of young people raised in the capital cannot afford to buy.
Thousands of young adults and essential workers, from teachers to nurses, are moving to the suburbs and commuter belt beyond, while central London is increasingly only open to oligarchs, City traders and the captains of industry.
Benham and Reeves analysed current market values across 28 areas of London’s prime property market, looking at the mortgage required to purchase a home and the average earnings needed at a lending multiple of 4.5 times income.
It found that even affording a typical property in London, where the average price is £523,376, would require a deposit of £78,506 and earnings of £98,860.
The firm said Mayfair represents the most exclusive and expensive place to live in the country with an average price tag of £4.1 million.
It said: “Even after placing a 15 percent deposit of £616,484, the average homebuyer would require an income of £776,314 to be eligible for a mortgage at 4.5 times their income.”
It added: “Across Knightsbridge, the average homebuyer needs to be earning £629,841 in order to be eligible for a mortgage, with this figure also sitting above £500,000 in Belgravia (£561,353).
“Even in Canary Wharf which is home to the most affordable average house price of all prime London locations at £534,977, the average homebuyer would still need to earn £101,051 to secure a mortgage.”
Director at the firm, Marc von Grundherr, said: “It’s fair to say that the London market has been hit hardest by a reduction in market activity as a result of higher interest rates, with buyers simply not able to stretch as far as they usually may have due to the higher cost of borrowing.
“When you look at the affordability of London homes it’s easy to see why, as unless you’re earning close to six figures, the prospects of purchasing a property alone are virtually impossible.
“The prime London market is a completely different animal in this respect and you really do have to be earning tremendous sums to be house hunting in the likes of Mayfair and Knightsbridge.
“However, it does highlight the strength of the London market, where even in times of market uncertainty, bricks and mortar continues to command the very best prices in the land, particularly across the prime London market.”
