Sunday, 19 December 2010

Kensington and Chelsea - house prices are twenty times earnings

How high can the house price to incomes ratio go? The Kensington and Chelsea property market suggests that a double digit ratio is perfectly possible.

The Department of Communities and Local government produce a large dataset of average house prices to median incomes for towns and boroughs. (The median, you will recall, is refers to the middle of the data series.  It means that half of all incomes are below the median and half are above.)  The data is only collected on an annual basis. Nevertheless, it does produce some interesting pictures.

Lets start with the central London district of Kensington and Chelsea.  The ratio of house prices to income hit 24 in 2008.  One thing is for sure, local people weren't buying up those dinky little terraced houses in Fulham.

Time permitting, I am happy to post other local house price to earnings ratios, so long as the data is available.  Contact me on


Anonymous said...

Simply stunning!

dearieme said...

If your house-buying is dominated by billionaire Russian ganngsters, and the rich fleeing the PIIGS, what on earth does the median income of the locals matter? You might as well calculate the ratio to the price of carrots.

Sureseam said...

Along with dearieme; I think you are conflating separate populations targetting separate housing stocks.

Even leaving out the foreign element there are the city types getting bonuses and targetting townhouses.

It is in someways similar to (say) Devon; however there even the most modest homes are bought by the wealthy as boltholes.

Alice Cook said...

Sureseam, dearieme

Thank you for your comments.

I agree with you - the foreign element is driving prices up in Kensington, and the connection between incomes and prices is rather tenuous.

However, that doesn't mean that the ratio is meaningless. It is telling us that locals have become totally priced out of the market. And that can not be a good thing.


David B said...

Oh Joy! I was editing my bookmarks and disover the wonderful Alice Cook still blogs. Now that is a good Christmas present.

Alice Cook said...


I have been a bad blogger, having disappeared for over a year. I was travelling, and it wasn't possible to keep the site going.

Still, I hope you have more prezzies than my blog this year.


Edina MN Realty said...
This comment has been removed by a blog administrator.