House prices have grown at almost double the rate of pay over the past five years in Islington, according to data released by Halifax bank.
Islington also registered the greatest disparity between house prices and average income of any area in the UK.
The figures, published last week, show that property prices in the borough soared by an astonishing £258,498 between 2010 and 2014, exceeding the take-home pay of Islington residents by £123,041.
Essentially, homeowners in Islington are earning more by not working than they are by working.
Martin Ellis, housing economist at Halifax, commented: “The housing market recovery over the past couple of years has resulted in some substantial prices rises in some areas of the country, particularly in London and the South East.
“This is good news for some homeowners. At the same time, it is challenging news for those looking to buy their first home in such areas, with prices being pushed out of range for many young people.”
The average house price in Islington now stands at £660,000.
Emily Thornberry, MP for Islington South and Finsbury, remarked: “”These figures didn’t come as a surprise, but they did put a disturbing trend into stark terms. We have a situation now where most young people in my constituency can’t even imagine owning their own homes.
“The new figures are a timely reminder of what we’ve all known for years – under this government, everything has gone up except people’s wages.”
The result of Islington’s burgeoning property prices has been the creation of an “asset rich, income-poor” generation who purchased their homes while house prices were comparatively low, and now sit in £2m or £3m Victorian terraces while on relatively modest salaries.
Conversely, young first-time buyers are struggling to enter the housing market even as high-earners.
James Watson*, a 26-year-old solicitor with a salary of £35,000, said: “Obviously house prices have become ridiculous. I have rented in Islington for some years now, but I would have to save for more than twenty years to even think about buying here.”
Hammersmith and Fulham had the second biggest rise in house prices in relation to total earnings, with houses in the borough earning £86,489 more than people over the past five years. Camden properties came in third with £75,725.
Nationally, the research carried out by Halifax found that homes were earning more than homeowners across nearly a fifth of the UK.
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