Ever feel like you are slipping behind in the rat race? Well, Londoners now face competition from their homes as well. The average house in the capital is now earning as much as its occupants.
As we noted noted last week, London house prices are rising far faster than in the rest of the UK, up 9.7 per cent over the 12 months to July on ONS figures.
With the average London house costing £438,000, the capital gain was worth £38,729. By comparison, the average London household had a post-tax income of £38,688 in 2011, the last year for which the ONS has statistics.
We appreciate that the comparison of an average apple to an average pear is useful only to illustrate the size of the
bubble gains from market enthusiasm. We’re ignoring capital gains taxes, hefty transaction costs, and the difficulty of extracting that value while still having somewhere to live.