Sales and pricing Affordability
We have titled this section “affordability”; we could just as well have called it “owner-occupiers”. What we are looking at here is the feasibility of acquiring a property in the capital for the average Londoner. Table 12 “does the maths”, and it’s obvious that the main barrier to entry is raising the deposit. In the example we have used, the deposit required
for a £300k flat would be £60k. The Office for National Statistics (ONS) states a median gross income of just over £34k per annum for London, equating to around £2,000 take-home pay per month. A “back of a beer mat” calculation (details available on request), which includes deductions from that take-home pay for rent,
food, travel, clothing, etc, suggests that, living fairly frugally, it would take an individual 10 years to save up this deposit. So are there any homes in the capital that are truly
affordable, with required deposits of, say, half of the above, which would take only five years to raise – a much more feasible time scale? The £/sq ft heat map at the start of this chapter is made up from pricing details of more than 400 schemes containing over 8,000 units. Map 7 below is a selection of the more affordable of those schemes (units below £200k), and Table 13 highlights some of those developments.
Map 7 Sub-£200k units within developments currently selling (March 2013)
Find out more about EGi London Residential Research and how it can help your business: visit
www.estatesgazette.com/london-residential
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