First-time buyers (FTBs) living in London looking to take their first step onto the property ladder pay twice as much as others anywhere else in the UK, spending on average £420,132 compared to £210,515.
This is according to new research from Lloyds Bank, revealing that the average price of an FTB house in the capital has climbed by nearly two-thirds in the last five years alone. Prices in the outer boroughs of the city have risen by 47 per cent during this period for all prospective buyers, while the average deposit that an FTB will have to pay is £92,833 – 62 per cent higher than it was back in 2013.
Since then, the number of buyers succeeding in getting on the housing ladder in London has dropped by five per cent to settle at 42,983 in 2017. Just five years ago, 17 per cent of all UK-based FTBs were in the capital, but this has now fallen to 12 per cent. Elevated house price levels are being put down to this slowdown in FTB activity.
Of course, we all know that property in London is pricy, with the average property in the capital selling for more than £600,000. But this latest report shows that the average house price in the city has risen by 40 per cent in 2013 to climb from £435,712 to hit £610,701 in 2018 – compared with a growth of 20 per cent in England and Wales.
Lloyds Bank mortgage products director Andrew Mason commented on the findings, saying: “Despite the recent slowdown in London house prices this latest data shows how expensive it has become to live in the capital, particularly for young people trying to get on the ladder for the first time. As a result, first-time buyers have to wait until they are 34 before getting their first foot on the property ladder.
“While property prices drop as you head to the fringes of the capital, our analysis is showing that this gap is closing as house price growth in outer London boroughs is continuing to increase at a greater pace than inner London boroughs.
“This healthy growth may be linked to a high demand for these more affordable properties as well as some areas benefiting from the new Crossrail link due to open next year as commuters move further afield.”
This comes after Lloyds Bank’s Affordable Cities Review, published back in February, showed that home affordability across UK cities has reached its worst level since 2007. The five least affordable cities for homebuyers were found to be Oxford, Cambridge, Greater London, Brighton and Hove and Bath. The average house price in cities rose by 36 per cent to its highest ever level of £232,945 last year.
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