It’s time for your weekly dose of depressing-London-property-market news, sorry! We all know about the astronomical cost of renting in the capital, and the scary amount of time it takes to save for a deposit on a first home. And now there’s some new data that’ll have you burying yourself under your duvet in despair (or celebrating your choice to live elsewhere).
The cost of a first-time buyer deposit on a London home has soared by 71% in the last five years, according to new data from Lloyds Bank. This means the average first home in the capital now costs the record-breaking sum of £405,000, reported the Evening Standard. London buyers take out an average loan of £317,253 when buying their first home and hand over an eye-watering £90,000 deposit.
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Londoners’ monthly mortgage payments have risen accordingly – in 2012, a typical first-time buyer spent £939 a month on their mortgage, but today? They’re shelling out nearly twice the UK average at £1,386.
Andrew Mason, mortgage director for Lloyds Bank, told the Standard there was a 5% fall in purchases among first-time buyers last year, “because monthly mortgage payments and deposits have increased substantially”.
Of course, the cost of a first home in London depends largely on the borough in which you choose to put down roots. Barking and Dagenham is the cheapest, with homes costing an average of £292,446 and deposits at £50,926. Croydon, Havering and Bexley are also at the more affordable end of the spectrum, with an average price of under £350,000 and deposits under £60,000.
Unfortunately, the relatively affordable areas that many first-time buyers gravitate towards have seen the sharpest price rises since 2012, the Standard reported. First homes in the Olympic boroughs of Waltham Forest, Newham and Greenwich have seen a colossal 90% increase in prices since the Games.
Among the most expensive areas for first-time buyers, however, are Westminster and Camden, where the average mortgage loan is more than £450,000 and monthly mortgage repayments are £2,016 and £1,973 respectively. Meanwhile, in Barking and Dagenham, Havering and Bexley, mortgage repayments are closer to £1,000-£1,200.
Many wannabe homeowners struggle to scrape together enough cash for a deposit on a London home, particularly if they’re buying alone, and it remains one of the biggest barriers to getting on the property ladder. Nationwide, the average deposit is far more affordable at £37,570. London, we love you, but your property market is bringing us down.
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