House prices in London now cost 14.5 times annual earnings – an all-time high for the city, Hometrack’s UK Cities House Price Index has found.
In London average property prices of £496,000 dwarf typical earnings of £34,200.
Other areas with steep house prices compared to earnings are the university cities of Cambridge (14.3%) and Oxford (12.6%).
Richard Donnell, research and insight director at Hometrack, said: “Unaffordability in London has reached a record high despite a material slowdown in the rate of house price growth over the last year.
“Lower housing turnover in the capital has led to a tightening of supply in recent months which has stabilised house price growth.
“Even so, the gap between average earnings and house prices in the capital has never been wider.”
The cities with the lowest property price to earnings ratio are Glasgow (3.9%), Liverpool (4.5%) and Newcastle (4.7%).
In those areas typical houses stand at £120,200, £117,700 and £125,200.
Donnell added: “As long as mortgage rates remain relatively low and the economy continues to improve, there is a strong feasibility that house prices will rise steadily in regional cities over the next two to three years.”