"The London market is notoriously expensive even for the average buyer, but for those looking to purchase a home at the very top of the ladder, the finances required are quite mind-boggling to say the least"
Benham and Reeves analysed sold price transactions for homes sold across London so far in 2023, looking at the median sold price of the top one per cent of these properties, before calculating the required income needed to buy based on placing a 15% deposit and at an average income to lending ratio of 4.5 times salary.
The research shows that so far across London, 8,119 homes have sold in 2023 with an average sold price of £525,000. However, the average sold price seen across the top one per cent of the market comes in at a far heftier £4.75m.
This means the average buyer looking to purchase in the top one per cent of the London property market would not only have to put down a deposit in excess of £700,000, but they would need to earn almost £900,000 a year to qualify for a mortgage at 4.5 times income.
Of course, across the nation’s most expensive market of Kensington and Chelsea, the required income is far, far higher.
So far this year, the top one per cent of homes sold across the borough have averaged £24.7m, meaning those looking to purchase at this very top tier of the market would require an annual income of almost £4.7m.
Camden ranks second where the top one per cent of homes have sold for an average of £14.1m in 2023, requiring an income of £2.7m.
Westminster completes the top three, where an average sold price of £13.75m across the top one per cent of the market so far this year means buyers would need to earn £2.6m a year to qualify.
Those looking to buy in the top one per cent of the market across Lambeth (£1.3m), Richmond (£1.2m), Merton (£1.1m) and Hammersmith and Fulham (£1.1m) would also need to earn in excess of £1m per year in order to do so.
Even at the other end of the table, the top one per cent of homes across Barking and Dagenham have sold for an average of £825,000 since the start of the year. While it’s the only borough where the average price of a home at the very top of the market sits below the £1m mark, buyers would still need to earn almost £156,000 a year to make their move.
Director of Benham and Reeves, Marc von Grundherr, commented:
“The London market is notoriously expensive even for the average buyer, but for those looking to purchase a home at the very top of the ladder, the finances required are quite mind-boggling to say the least.
"The average price paid across the most exclusive pockets of Kensington and Chelsea is currently sitting at almost £25 million so far this year. Of course, those with the financial firepower to make such a purchase are unlikely to be phased by lending restrictions, but to put it into perspective, the average buyer would need an income of almost £4.7 million a year in order to qualify.”