Average London home set to hit £400,000 by 2011
Average house prices in London are set to soar over the next five years to nearly £400,000, the London Housing Federation (LHF) has predicted.
The LHF, which represents London's 400 housing associations, has forecast that house prices will rise by 34 per cent by 2011, taking the price of the average London home to £392,000.
But with average London houses already costing almost £300,000 - some nine times the average Londoner's salary - people will find it ever more difficult to get on to the property ladder.
"London is facing a housing timebomb," said Berwyn Kinsey, head of the London Housing Federation, said.
"House prices, already sky-high, are expected to rocket by another £100,000 over the next five years, making it even harder for people to get on the housing ladder."
The LHF has predicted that wages will grow by between 4.1 and 4.4 per cent per year between now and 2011, while house prices in the capital will grow by an average of seven per cent.
"Londoners are increasingly left with the choice of expensive rental accommodation, living in house shares or with parents or leaving the capital altogether," Mr Kinsey said.
"Many thousands more are homeless or living in overcrowded conditions as demand for affordable housing outstrips supply."
Since 1997 the average London house price has grown in value by 139 per cent, compared with wage inflation of just 34 per cent.
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