The house price gap between London and England and Wales now stands at just under £300,000 after ballooning over the last 20 years, a report has found.
In 1996, an average home in London was valued at £105,266 – around £33,834 more than one in England and Wales generally, according to research by Lloyds Bank.
But by 2016 the price gap had increased to £299,631 – with a typical home in London priced at £578,381 and an average property in England and Wales costing £278,750.
A typical home in London now costs nearly 12 times average earnings, compared with just under four times earnings in 1996.
Across England and Wales generally, the average house price-to-earnings ratio has increased from three-and-a-half times earnings in 1996 to more than seven times average wages.
Looking across London, Lloyds found the borough of Hackney has seen the strongest percentage growth in house prices over the last two decades.
The average price in Hackney has surged by 702%, from £75,569 in 1996 to £606,269 in 2016.
An average home in Hackney, which has become known as a hipster hotspot in recent years as the area has undergone “gentrification”, is now priced at more than 14 times the average local wage. In 1996, a typical property could have been bought in Hackney for just over three times the average local wage.
Homes in Westminster have seen the next largest rise in average prices over the past 20 years, from £190,438 in 1996 to £1,424,388 in 2016 – an increase of 648% .
Lloyds Bank mortgage director Andrew Mason said improved transport links into London from outer boroughs and the 2012 Olympic Games have directly benefited parts of the capital, leading to house price growth in some of London’s less expensive areas outpacing that in “prime” London in recent years.
Lloyds said in 1996 average house prices were below £100,000 across nearly two-thirds (64%) of London’s boroughs – but 20 years later average prices are now more than £500,000 for over half (58%) of these areas.
Kensington and Chelsea, Westminster, Camden and Hammersmith and Fulham have retained their place as London’s four most expensive boroughs over the last 20 years.
Kensington and Chelsea is the most expensive borough, with the average home there valued at £1.8 million – 11.2 times the local average salary.
In Westminster, a home is typically worth 18.5 times local earnings, while in Camden an average home is priced at 20 times the average local wage.
Lloyds said Camden was London’s least affordable borough for house prices compared with local wages 20 years ago, and it still is now, with the average home in Camden now priced at £1 million.
Barking and Dagenham was found to be London’s least expensive borough for house prices, with the average home there priced at £285,129 – 9.1 times average local earnings.
Lloyds said the most affordable London boroughs when comparing house prices with local wages are Bexley and Havering, where a home costs around seven times average earnings.