The average cost of a first-time buyer home in the capital has soared by nearly two-thirds over the past five years.
Despite the recent slowdown in London house prices, first-time buyers still have to fork out TWICE as much to step on to the housing ladder in the capital than anywhere else in the UK.
First-time buyers are now forced to pay £420,132 for a home in London, compared with £210,515 across the rest of the country, according to Lloyds Bank.
The average price of a first-time buyer home in the capital has soared by nearly two-thirds since 2013, from £255,794 to £420,132.
And the typical deposit put down by a first-time buyer in London now stands at an eye-watering £92,833. That’s 62% higher than five years ago.
Unsurprisingly, the number of buyers breaking into the capital’s housing market since 2013 has dropped 5% to 42,983.
Why is this happening?
House prices outstripping wage inflation is a key factor in the slowdown of first-time buyer activity in London.
Property values in the capital have shot up 40% from £435,712 in 2013 to £610,701 in 2018 – compared with 20% growth across England and Wales.
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Above: one-bedroom flat for sale in Canary Wharf, London
Who does it affect?
The research clearly doesn’t bode well for renters eyeing their first move into the housing market in London.
First-time buyers in Camden face the greatest uphill struggle to become homeowners. The borough commands the highest deposit, increasing 28% from £137,079 in 2013 to £175,844 in 2018.
Meanwhile, first-time buyers in Haringey have seen the biggest increase in deposits paid, doubling from £63,447 to £131,827 over the last five years.
It’s perhaps unsurprising then, that the average age of first-time buyers in London is 34, compared with 31 in the UK.
What’s the background?
Property prices in the once-cheaper outskirts of London are catching up with the rest of the city. The average house price in the periphery in 2013 was £348,230 – 20% less than the capital as a whole. Today, the gap is just 16%.
Lloyds Bank claims that it is still cheaper to buy than rent in the capital. A three-bedroom house in London would set a first-time buyer and a renter back £1,248 and £1,545 per month respectively. That's a difference of £3,568 each year.
Top 3 takeaways
First-time buyers have to fork out twice as much to step onto the housing ladder in the capital than anywhere else in the UK
- The average price of a first-time buyer home in the capital has soared by nearly two-thirds since 2013
- The typical deposit put down by a first-time buyer is now 62% higher than five years ago
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