The average buyer requires an estimated income of £4.7m in order to purchase a property in the top 1% of the market, according to research by Benham and Reeves.
The London lettings and estate agent analysed transactions across London so far in 2023, looking at the median price of the top one percent, before calculating the required income needed to buy based on placing a 15% deposit and at an average income-to-lending ratio of 4.5 times salary.
The research found that so far across London, 8,119 homes have sold in 2023 with an average sold price of £525,000. However, the average sold price seen across the top 1% of the market comes in at £4.75m.
This means the average buyer looking to purchase in the top 1% of the London property market would not only have to put down a deposit in excess of £700,000, but they would also need to earn almost £900,000 a year to qualify for a mortgage at 4.5 times income.
Across the nation’s most expensive market of Kensington and Chelsea, the required income is much higher. So far this year, the top 1% of homes sold across the borough have averaged £24.7m, meaning those looking to purchase at this very top tier of the market would require an annual income of almost £4.7m.
Camden ranks second, with the top 1% of homes having sold for an average of £14.1m in 2023, requiring an income of £2.7m.
Westminster completes the top three, with an average sold price of £13.75m across the top 1% of the market so far this year, meaning buyers would need to earn £2.6m a year to qualify.
Those looking to buy in the top 1% of the market across Lambeth (£1.3m), Richmond (£1.2m), Merton (£1.1m) and Hammersmith and Fulham (£1.1m) would also need to earn in excess of £1m per year in order to do so.
Even at the other end of the table, the top 1% of homes across Barking and Dagenham have sold for an average of £825,000 since the start of the year. While it’s the only borough where the average price of a home at the very top of the market sits below the £1m mark, buyers would still need to earn almost £156,000 a year to make their move.
Marc von Grundherr, director of Benham and Reeves, commented: “The London market is notoriously expensive even for the average buyer, but for those looking to purchase a home at the very top of the ladder, the finances required are quite mind boggling, to say the least.”
