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BUBBLING UP

The average London home gained enough value in the past six months to put a kid through university

Reuters/Toby Melville
Cashing in.
Jason Karaian
By Jason Karaian

Global finance and economics editor

This article is more than 2 years old.

If you have £459,000 ($773,000) to spare or a healthy appetite for debt, property in London is for you. That’s the current average price for a home in the British capital, according to the latest data from the Office for National Statistics. That’s an increase of 17% over the past year, or £61,000 in absolute terms, versus 5% and £9,000 in the rest of the country.

Bank of England governor Mark Carney has labeled the frothy property market the “biggest risk to financial stability” in the country. Lenders must now follow stricter checks on borrowers, according to new rules introduced last month. Lloyds Banking Group has voluntarily introduced a new policy capping the price-to-income level it will use to approve its biggest mortgages. The bank described it as “a targeted response to an issue largely in the upper tiers of the London housing market.”

We have tried to put London’s gravity-defying property market in context before. Here is another attempt. This is what you could buy for just the change in the average London property price over various time periods, from one month to 10 years:

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