All London boroughs now ‘unaffordable’ for local salaries — here’s the pay increase you’d need to afford a home in your area

Every London borough is now out of reach to local buyers, according to exclusive data shared with Homes & Property.

Analysis carried out by alternative-funding provider Wayhome found that, across London, two people buying together now need above-average income for their area to be able to borrow enough for a typical local property — even assuming a 15 per cent deposit and a lender offering four times their joint salary.

The least affordable borough is the ultra-exclusive Kensington & Chelsea, where the gap between typical joint income and lenders’ loan-to-income requirements is £138,994.

In Westminster, joint buyers need a pay rise of £85,100 to afford a typical home, followed by Camden, Islington and Haringey, where salary shortfalls exceed £50,000.

In Bexley, consistently named by house price indices as one of London’s cheapest areas for homebuyers, residents need to add six per cent to the average joint pay of £82,300 to get on or move up the property ladder.

Other London boroughs to make up the five “most affordable” for local residents are Wandsworth, where the average joint income of £130,000 leaves the affordability gap at £6,800; Tower Hamlets (£10,100), Greenwich (£12,700) and Bromley (£13,735).

The research found that at a national level, two people buying together can afford a typical home on an average local salary. But a more localised break-down reveals that almost half of UK areas are unaffordable for joint buyers on average salaries to secure an 85 per cent mortgage.

Some of the closest places to London to feature housing markets in line with resident pay include Slough, Milton Keynes and Reading, according to the research.

Nationwide recently revealed that people joining the property ladder in the capital could now expect to spend two-thirds of their take-home pay on their mortgage. Andrew Harvey, senior economist at the building society, said home loans were at their most expensive for over a decade in the final months of last year and housing affordability was “set to remain challenging”.

Table: the five most affordable boroughs for local buyers

London borough

Average house price

Average salary

Borrowing requirement

Borrowing potential for joint buyers


Salary increase needed















Tower Hamlets





















Source: Wayhome analysis of ONS data sets

Labour’s London Assembly housing spokesperson Sem Moema said the latest figures “highlight the immense challenges Londoners face trying to get on the housing ladder”.

Under half of London households now own their own home, Ms Moema said, compared with 62 per cent of those nationwide.

“The prospect of saving for a deposit is now an impossible dream for many Londoners, especially front-line workers who keep our city running. Thousands, possibly millions, of Londoners are being priced out of a home,” she added.

Wayhome chief executive Nigel Purves said it had “never been tougher” for many to get a foot on the property ladder.

The cost of homeownership had hit “record highs”, he said. “At the same time, wage growth has failed to keep pace, while the cost of borrowing has also increased following a string of successive interest rate hikes.”

Table: the five least affordable boroughs for local buyers

London borough

Average house price

Average salary

Borrowing requirement

Joint buyers’ borrowing potential


Salary increase needed

Kensington and Chelsea







City of Westminster




























Source: Wayhome analysis of ONS data sets

Could there be glimmers of hope?

Simon Bath, chief executive of property technology provider iPlace Global, said the unaffordability statistics showed just how “inaccessible” the London housing market had become.

“It’s easy for the average buyer to become disillusioned when you see that even in the cheapest areas to buy, you still need a considerable pay rise to afford to get on the property ladder,” he said.

“As a result, we’ve seen an increasing number of people band together with friends or partners in order to comfortably afford a home.

However, he added that there was still strong demand for home ownership and predicted that falling house prices and softening lender rates could prompt change.

“This will hopefully bring a renewed sense of optimism within the housing market over the next few months.”

Support schemes

Nicholas Mendes, mortgage technical manager at independent adviser John Charcol, said Londoners had seen their borrowing power fall in the last year as house prices rose and lenders grew cautious about wider economic conditions. But he said there were several initiatives to help.

He pointed to schemes designed to support buyers, such as Right to Buy and First Homes, which offer discounts to certain council tenants and first-time buyers.

Mendes added that Charcol has a guide to family springboard mortgages, which allow people to buy a home using financial security provided by family members, and advises on other options for those needing a boost.