A Londoner earning £80,000 — Labour’s threshold for higher tax rates — is already priced out of buying the average-priced home on many of the city’s streets, according to analysis.
Shadow chancellor John McDonnell said this weekend that income tax for those on £80,000 or more would rise to pay for better public services if Jeremy Corbyn became prime minister.
But experts said even high earners in this bracket faced a struggle to get on London’s property ladder. Armed with a 20 per cent deposit of £80,000 and a mortgage of four times salary — the maximum most lenders will advance — the purchaser would be able to raise £400,000 if buying on their own.
According to analysis by agents Savills, that is enough to pay for the average-priced home in only six London boroughs: Barking & Dagenham, Bexley, Havering, Newham, Croydon and Sutton. Across the capital’s 631 local council wards where there is an active property market, only 200, or 32 per cent, have average prices below the £400,000 mark.
The cheapest ward is Bexley’s Thamesmead East, where prices average £243,012. In inner London there are only 22 wards where prices average below £400,000. The cheapest is Thamesmead Moorings in Greenwich with an average price of £254,994.
In 10 boroughs there is not a single ward where average prices are below £400,000. The most expensive is Knightsbridge & Belgravia in Westminster, with average prices of £4,279,127.
Lucian Cook, of Savills, said: “An £80,000 salary is not going to get you that far, you will still not be able to afford large swathes of the capital. If you then find yourself facing a higher tax burden that is going to further impact where you are going to be able to buy.”
