England’s broken housing market has seen London surge away from the rest of the country at an ever increasing rate, meaning buying in the capital could soon become off limits for anyone whose parents do not already have a stake in the property wealth there.
A new report from the National Housing Federation shows for the first time the amount of equity lost per property across the country outside of London during the economic crash.
Broken Market, Broken Dreams found that between 2006 and 2012 the largest economic crash this country has faced caused a widening gap between the property wealth held by homeowners in London and the rest of England. While the average amount of equity in homes plummeted across the North and Midlands between 2006 and 2012, London continued to pull away from the rest of the country and enjoy an increase in equity post-crash. As a result, the equity gap between the North East and London increased by almost a third from £100,000 to £131,000 in just six years.
As two out of three first time buyers rely on family money to get on the ladder, the National Housing Federation warns that the widening imbalance in equity is limiting geographic and social mobility across England. London could soon become the preserve of only the super-rich and people whose families already have an existing stake in the capital’s property market.
The consequences of this are as yet unknown, yet the fear is that London will suffer as young vibrant talent will be less attracted in the capital unless more homes are built.
David Orr, chief executive of the National Housing Federation, said: “London’s housing market is rocketing out of control, surging away from the rest of the country.
“In the seventies and eighties you could move wherever you wanted to in the country, from the South to the North or vice versa. Today more and more people are moving around the country for career or lifestyle choices. Not everyone wants to live in London but with many industries focussed in the capital many people feel its pull. Yet London’s housing market is so out of kilter with the rest of the country that it could prove to be the buffer that stops future generations moving to and working in our capital city. This is a detriment both to the city and to young people themselves.
“We are calling on the next government to commit to ending the housing crisis in a generation by publishing a long-term plan of how they will tackle the underlying causes, including how to tackle London’s housing market.”
