How high can the house price to incomes ratio go? The Kensington and Chelsea property market suggests that a double digit ratio is perfectly possible.
The Department of Communities and Local government produce a large dataset of average house prices to median incomes for towns and boroughs. (The median, you will recall, is refers to the middle of the data series. It means that half of all incomes are below the median and half are above.) The data is only collected on an annual basis. Nevertheless, it does produce some interesting pictures.
Lets start with the central London district of Kensington and Chelsea. The ratio of house prices to income hit 24 in 2008. One thing is for sure, local people weren't buying up those dinky little terraced houses in Fulham.
Time permitting, I am happy to post other local house price to earnings ratios, so long as the data is available. Contact me on ukhousebubble@aol.com
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