Chart of the week: another housing bubble?

First time buyers' house price/earnings ratio“Houses can only be worth what citizens can afford,” as Economist.com’s Buttonwood blog points out. “And that, once more, is becoming a stretch.”

In London, first-time buyers have to cough up an absurd eight times the average annual wage to buy a house.

For Britain as a whole, the house price-to-earnings ratio is rapidly heading towards five. It’s above the long-term average, far above the level reached in the late 1980s housing bubble, and not far off its 2007 peak.

• Stay up to date with MoneyWeek: Follow us on TwitterFacebook and Google+

MoneyWeek magazine

Latest issue:

Magazine cover
What a farce!

John Stepek on surviving the Greek fallout

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

From ADRs to Z scores – all the terms you wish you understood, but were too embarrassed to ask about.

Gervais Williams: if you want real dividend growth, buy small-cap stocks

Merryn Somerset Webb interviews small-cap stock expert Gervais Williams about how penny shares outperform blue chips 'again and again'.


Which investment platform is the right one for you?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from, with varying fees and charges. Find out which is best for you.


30 June 1937: The 999 emergency services line opens


On this day, the 999 emergency services telephone line opens in London, but it wasn't until a week later that the first call was received when a man spotted a burglar in his garden.


Anatomy of a Grexit: how Greece would go about leaving the euro

Jonathan Loynes and Jennifer McKeown, economists at Capital Economics, look at the key issues and challenges of a Grexit, how it might be best managed, and set out a timetable for change.