It's no surprise that real estate prices in London, like New York, have gone sky high. But a new report released earlier today about home prices in England and Wales show a stark increase, which is helping turn commuter suburbs of the English capital into red-hot markets and driving new concerns about affordability.
The recent House Price Index, released by the Land Registry, shows average home prices in England and Wales have risen 6.1 percent over the last year, with the average house now costing £190,275 ($274,368). But the jump in London, a stratospheric 13.5 percent year-over-year, far outpaces the 1.5 percent jump in wages. The city's competitive marker has also bumped up prices in surrounding areas and suburbs; prices in the Essex borough of Thurrock, located about an hour east of London, rose at 17.2 percent, and those in commuting towns such as Slough, Luton and Reading rose 19 percent.
This price jump in London is slightly above the one in New York, especially Manhattan, which saw 12 percent growth in housing prices according to a recent year-over-year comparison. That's not as steep an ascent as New Orleans, which saw home prices rise 14 percent in 2015. Granted, these are far from direct comparisons, and rising housing prices in big cities isn't exactly breaking news. But the continued acceleration of home prices in many metro areas has alarmed advocates of affordable housing, making the expansion of less expensive housing options seem like even more of an imperative for major metro areas.