London market fuelled by huge discrepancies

The London Housing Federation (LHF) has said that the London housing market has been split in two, with many now completely unable to afford a home in the capital.

The average price of a home in London is now 13 times higher than the average income, the LHF has said.

This problem is exemplified by the borough of Kensington & Chelsea, a new LHF report suggested. While many buyers are attracted to the area because of its prestige, there are some 11,000 households on waiting lists in the borough.

"For London to remain the great world city it is, we need more affordable homes, and we need them soon," said LHF regional manager Olivia Powis.

"Prime minister Gordon Brown has pledged £8 billion to build new affordable homes nationwide over the next three years.

"From this, housing associations in London need adequate funding to meet and exceed the Mayor's target of delivering 50,000 affordable homes by 2011," Ms Powis recommended.

Average house price growth in London has continually surpassed the national average in 2007, according to almost all the major house price indices.

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