Do you ever wonder what it takes to own a property in the crème de la crème of London's real estate? Hold on to your hats because the figures are nothing short of astonishing! According to a study by Benham and Reeves, esteemed London lettings and estate agent, the average buyer aiming for the top 1% of the market needs an estimated income of a staggering £4.7 million. Talk about living the high life!
Benham and Reeves delved into property transactions across London in 2023 to arrive at this eye-popping figure. They calculated the median price of the top 1% and then determined the income required based on a 15% deposit and the average income-to-lending ratio of 4.5 times salary. Brace yourselves for these jaw-dropping stats!
So far this year, 8,119 homes have changed hands across London, with the average sold price at £525,000. However, to crack the exclusive top 1% bracket, you'll need to set your sights on properties boasting an average price tag of £4.75 million. But that's not all! In addition to shelling out a deposit surpassing £700,000, aspiring buyers would have to earn almost £900,000 annually to qualify for a mortgage based on a 4.5 times income ratio. Let that sink in!
Let's zoom in on Kensington and Chelsea, the nation's most prestigious market. Prepare yourselves for the stratospheric numbers! So far this year, the top 1% of homes sold in this borough have commanded an average price of £24.7 million. If you're eyeing a property in this upper echelon, you better have an annual income of nearly £4.7 million to make your dream a reality. Talk about reaching for the stars!
Next, we have Camden, a neighborhood known for its luxurious properties. The top 1% of homes in Camden sold for an average of £14.1 million in 2023, requiring an income of £2.7 million to make it rain in this exclusive market.
Completing the podium is Westminster, where the top 1% of properties boasted an average sold price of £13.75 million. To join the elite club of Westminster homeowners, aspiring buyers must earn a cool £2.6 million annually. Can you imagine?
The prestigious boroughs of Lambeth (£1.3 million), Richmond (£1.2 million), Merton (£1.1 million), and Hammersmith and Fulham (£1.1 million) also demand hefty six-figure incomes, with aspiring buyers needing to earn over £1 million per year to secure their spot in the top 1% of the market.
But wait, there's more! Even in more affordable boroughs like Barking and Dagenham, the top 1% of homes have sold for an average of £825,000 since the start of the year. While it's the only borough where prices at the top end fall below the £1 million mark, buyers still need to earn nearly £156,000 per year to make their move. Phew!
Marc von Grundherr, the director of Benham and Reeves, couldn't help but comment on these mind-boggling figures, stating, "The London market is notoriously expensive even for the average buyer, but for those looking to purchase a home at the very top of the ladder, the finances required are quite mind-boggling, to say the least."
So, for all you UK property buyers and investors, whether you're aiming high or seeking lucrative opportunities in London's market, buckle up and prepare for the ride of a lifetime! With the right financial prowess and a touch of luck, you, too, could become a part of London's elite property landscape. Happy investing!