23 May, 2018/ by Homeward Legal /First Time Buyer
First-time buyers in London are paying twice as much as anywhere else in the UK to purchase their first home. According to figures from Lloyds Bank, a first-time buyer in the capital will have to pay £420,132 to own a home while FTBs elsewhere in the UK will only pay on average £210,515.
The cost of a first home in London has risen by 64 percent in the last five years. In 2013, the average first home for a FTB was £255,794. But the hefty asking price for a home in London now also means a hefty deposit for FTBs. On average, they must have £92,833 to fund their initial purchase, up an extraordinary 62 percent on FTB deposits in 2013.
In contrast, FTBs across the UK can expect to be asked for an average deposit of £39,668.
The capital's outer boroughs, once a choice for many because of more affordable property prices, are now creeping up in cost. According to Lloyds, house prices there have almost doubled (up 47 percent) in the last five years for all buyers.
The increase in property prices is reflected in data that shows a falling number of FTBs getting on to the property ladder in London, down by 5 percent on the 2013 figures. In 2013, 17 percent of all FTBs in the UK were in London, a figure that fell to 12 percent in 2017.
However, the Lloyds research confirms that it is still cheaper to buy than to rent in London: The mortgage on a typical three-bed home in the capital is around £1,240 per month compared to £1,500 to rent.
Andrew Mason, Lloyds Bank mortgage products director, said: "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."