House Price to Earnings Ratio

The interesting thing is to see how much the house price to earnings ratio for first time buyers fell at the end of the 1990-93 crash. The ratio of house prices to earnings fell close to 2.0.

At the height of the 2007 boom, house price to earnings ratios peaked at over 5.0 and in London at over 7.0. This reflected

• low interest rates
• High mortgage multiples
• Use of parents to get deposits

Although house price to earnings ratios have fallen, they still remain high by historical standards.