Accelerating wage growth has lowered the house price to earnings ratio, even as house prices themselves have continued to climb. Indeed, London has already seen an 11% drop in earnings-adjusted prices. Looking ahead, we expect wage growth to drive a further fall in the house price-to-earnings ratio. That will bring prices to a more sustainable footing by 2021, without the need for a house price collapse.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services