Property Boom Leaves Many Unable To Buy

A combination of soaring house prices and falling real wages is making home ownership an ever more distant dream for some.

The proportion of English and Welsh homes selling for over £1m has more than doubled during the Great Recession, in the latest evidence of the property market boom.

In London a record 7% of all home sales listed by the Land Registry in the year to March were for £1m or more - a sharp increase from the 3% level when Britain slid into recession in 2008.

Overall, the number of homes sold for £1m or more over the past year has surpassed 10,000 for the first time - with just over 11,000 £1m sales in the year to March.

This compares to around 9,000 at the peak of the pre-crisis boom.

Sky News analysis has also uncovered the affordability gap between different local authorities has reached unprecedented levels, driven up by a combination of high house prices and falling real wages.

Darker areas show the higher house price to earnings ratios in England

The numbers come as the Bank of England governor warns its Financial Policy Committee will not target house prices but will tackle risks to stability within the housing market.

With the economy recovering faster than many had expected and house prices pushing ever higher, the Bank is widely expected to lift interest rates within a year - and may add further checks on housing market lending as early as next month.

Across the country as a whole, some 1.4% of homes sold in the past year went for £1m or over, another record, and more than double the 0.7% at the beginning of 2008.

Analysts said even these Land Registry figures may understate the extent of the £1m-plus property market, since they exclude many properties bought through corporate vehicles.

The vast majority of these sales - 7,692 of the 11,341 properties sold for £1m or over in England and Wales over the past year - were in London.

However, because wages have not kept pace with rising house prices, the capacity of families to afford bricks and mortar has diminished.

Although one closely-watched measure of housing affordability - house prices vs earnings - remains below its pre-crisis peak, it has risen to unprecedented levels in London.

In Kensington & Chelsea, average property prices hit 22 times the average earnings of local residents last year - a doubling in the past decade.

They are also at 20 times earnings in Westminster, and 12 times earnings in inner London as a whole.

By contrast, prices in Burnley remain 2.9 times the average earnings in the local area, down sharply from the 4 times earnings peak reached in 2007.

The statistics, which are derived from Land Registry and Office for National Statistics data, illustrate the scale of differences in house price performance throughout the country.

Although London boroughs dominate the top of the unaffordability rankings, there are exceptions.