As London house prices continue to soar, it becomes hard to come up with new ways to describe their relentless rise. Another month, another record gain.
The UK’s national statistics agency recently released its latest estimate of house prices, one of the more comprehensive surveys out there. The headline stat is that the average London home in February was worth £458,000 ($766,000), up nearly 18% from a year ago. This was the fastest annual pace since at least 2002, as far back as this particular dataset goes.
In an effort to put London’s turbo-charged property prices in context, the chart below shows how many houses you could buy outside of the capital for the same cost as a single dwelling in London. In Northern Ireland, for example, you could buy three homes and still have nearly £70,000 left over to deck them out with chandeliers and water features.
How does London compare with housing markets outside of the UK? For data consistency reasons, cross-border comparisons come with a strong health warning. But for a (very) rough approximation of what you could buy in selected US metropolitan areas for the same price as in the greater London area, the chart below takes fourth-quarter 2013 data for single-family homes published by the US National Association of Realtors (the latest available) and compares it with numbers from the UK statistics agency for December.
Again, these datasets do not necessarily use similar sources and methods, so any conclusions carry many caveats. But for what it’s worth, only prices in Silicon Valley, the subject of many angst-ridden articles about an acute housing crisis, appear to come close to London’s levels. For the average price of a modestly-sized house in the British capital, in any other American metropolitan area you could buy a home—in some cases, a small property empire—and have money left to spare.