Housing boom hits life in London

LONDON'S housing market boom has led to a deterioration in the quality of life in the capital, it is claimed. Business lobby group London First says millions of people are unable to get on the first rung of the property ladder or move up it because house prices are rising faster than incomes. Escalating crime and a sharp fall in the number of new businesses has also dented the appeal of London over the past year.

The claims are made in a London First report aimed at measuring Londoners' quality of life by constructing a so-called 'sustainability index'. The index, made up of a wide range of economic, environmental and social components, has fallen during the past year.

One of the biggest deteriorating components is housing affordability, whose index plummeted from 56 in 2000 to 32 in 2001. David Fell, head of the sustainability unit at London First, said: 'House prices have grown much faster than incomes over the past six years - so much so that London's quality of life is being seriously undermined.'

In the past year, property values have surged by 15% while incomes rose by 6%. Other sharply deteriorating indices are those for crime, which fell from 90 to 84, and new company formation, down from 129 to 101.

In contrast, the report suggests economic and environ-mental progress have been strong. Gross domestic product, a measure of overall economic activity, has risen, as have river quality, the proportion of domestic waste being recycled and the number of birds.