Research reveals income needed to buy within top 1% of market

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.”

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2 Comments

  1. LVW4

    Those buying in the top 1% in Kensington are not worried about house prices. But interesting to note I bought in London in 2005 and sold in 2019 in the Richmond area for above that average, and wasn’t earning anything like that.

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  2. northernlandlord

    Bit of a non-article this one. People who buy the top houses don’t pop into a High St building society to borrow at 4.5 times earnings. Many people just buy in cash. This might be using legally gained cash from abroad or to launder ill- gotten gains to provide a financial cushion in the UK in case the wheels come off in the regime back home and the buyer has to do a runner. Other rich people hide their money away in complex financial structures. They might have high net worth but declare minimal income so they don’t pay tax at anything like the percentage the rest of us have to. Once you are in the rich league all sorts of finance options and deals are open to you that are not available to average people.
    The statement “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” doesn’t look right either. Using the 4.5 times earning you wouldn’t need to earn £1.0M to buy in any of these area an income of “only” £240-300K would do it for you.

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