House prices in Southwark are thirteen times the amount of money an average person in the borough makes in a year, according to new countrywide statistics that shed light on the shocking state of the property market across England and Wales.
But the ratio of house prices to wages in Southwark went down slightly in the pandemic, falling to 12.3 in 2020 from 14.2 in 2017. The Office for National Statistics’ (ONS) figures released on Wednesday (March 23) show that the house price-to-wage disparity is rebounding already.
Southwark is by no means the worst in the country, or indeed London. Kensington and Chelsea in west London – home to Russian oligarch Roman Abramovich’s £150 million mansion – has average property prices nearly 36 times higher than the annual wages of its average resident. Other London boroughs were also bad – the top six least affordable local authorities in England and Wales are in London in 2021.
In south-east London, Lambeth, Lewisham and Bromley also all have slightly bigger gaps between property prices and wages than Southwark.
Dirty Russian money “ridiculously” inflating local house prices, says MP
Although the situation may not be as bad in Southwark as it is in other parts of London, the gap between property prices and what people earn has widened vastly since 1997, the year when the ONS figures begin. In that year, the average house price in Southwark was 3.8 times the annual earnings of a resident of the borough.
And Southwark was considerably worse than the average for all local authorities in England and Wales in 2021, which showed house prices were 9.1 times higher than earnings. Southwark’s house price-to-wage in 1997 was only marginally higher than the national average, which was 3.5.
Bermondsey and Old Southwark MP Neil Coyle has blamed unaffordable housing in Southwark on “corrupt Russian money”, as reported in the News in February.
Coyle said: ““In Southwark, we know better than most about rising house prices, but the market is badly over-heated due in part due to corruption with Russians and others buying houses at ridiculously inflated prices in order to launder finance through our capital. ”
He said that “the Government admits there is a problem but has failed to act for years, adding to London’s housing crisis and leaving some homes empty that could be better used.”
The picture is bleak across much of England and Wales, according to the ONS. Affordability got worse in more than 91 per cent of local authorities. Average house prices increased in 96 per cent of local authorities, while average earnings rose in just half.