The average price of a London home will top the £1m mark by 2030 and could rise higher if property price inflation continues to outpace earnings growth.
The average price of a London home currently stands at £490,000, but analyst Oxford Economics says stronger population growth and higher employment combined with a shortage of housing would drive property price inflation in the capital.
The global forecaster, which has published analysis of change that is likely to confront London’s economy between 2015 and 2030, says the capital’s population will rise to 11 million by the middle of the next decade, from around 8.5m today.
Although forecasts published by the Mayor of London's office indicate that just 10 million people will live in the capital by 2036, Oxford Economics says this projection doesn't take into account the increase in employment over the last couple of years.
The analysts add that if the rapid rise in population growth coincides with “an increasing divergence between those with high and low incomes, then it will mean affordability problems for people on low incomes. Of course a lot will depend on the rate of house building.”
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