Demand for housing in London has outgrown the number of homes by almost a third since 1998

Index, 1998 = 100. Demand is what Londoners would have wanted had prices stayed at 1998 levels in real terms. Demand is driven by increased population and higher real incomes.

Demand is population growth multiplied by growth in real GDP per head raised to an income elasticity of two-thirds, the estimate of Albouy, Ehrlich and Liu (2016), who treat it as a lower bound; the Reading affordability model used by ODPM (2005) implies 1. Supply is the number of homes; the average London home has barely changed in size since 1998. 2024 output is provisional.
Chart: Centre for British ProgressSource: ONS mid-year population estimates via Nomis; MHCLG Live Table 109; ONS regional GDP, all ITL regions (Table 11)Get the data