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Average home in London to reach £1m by 2030


It has been predicted that the average house price in London will reach £1m by 2030, according to research by Oxford Economics.

The research suggested that house prices will continue to rapidly increase as a result of strong jobs growth, a growing population and a severe housing shortage.

There are currently around 8.5m people living in London, but this could increase to around 11m in the next decade, according the research.

These projections are in stark contrast to forecasts by the Mayor of London’s office, which has previously suggested that the population will reach 10m by 2036. Analysts at Oxford Economics have claimed that this discrepancy in projections is because the Mayor of London’s figures are relying on assumptions that do not take into account rapid employment growth, which has been achieved over the last two years.

Oxford Economics have therefore forecast a much faster employment growth in the city over the next two decades. Analysts have said that if these employment projections were correct, then the housing shortage would drive average house prices in London towards the £1m figure by 2030.


The analysts at Oxford Economics also warned of the effects of house prices continuing to outpace earnings growth.

They said that if house prices continued to increase at a faster rate than wages did, then the average house prices in London could actually exceed £1m before 2030.

Richard Holt, head of global cities research at Oxford Economics said that such an increase in housing costs could mean that a generation of Britons could miss out on ever owning their own home.

Mr Holt continued to say:

"If everybody’s pay rises at the same rate, that may not be too much of a problem. But if pay at the top end rises much faster than for people on low wages, then the affordability challenge will just get worse",

The report also outlined a similar warning about the effect of a growing gap between high and low incomes by stating that “an increasing divergence between those with high and low incomes” would create even more affordability issues.

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