The first-time buyer struggle
Soaring property prices in the UK is a fact, especially if talking about London. Surprisingly though, according to recent studies from Lloyds Bank, those who decide to buy in London are forced to pay more than double on their mortgage than anywhere else in the UK, something that discourages the majority of first-time buyers.
The average price of a first home in the capital climbs up to £420,132 while in the rest of Britain reaches up to £210,515 according to Lloyds Bank. Moreover, the average deposit in London is more than £90,000, which makes it 60% higher than the past 5 years. The area with the highest deposits is Camden, where the average is £174,844 but first-time buyers seem to have their eye on Haringey, as it is the area with the biggest increase in deposits, almost double within 5 years.
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But keeping in mind that house prices incessantly increase and salaries remain on the same levels, the figures suggest that the millennials will either be able to afford their first homes in their late 30s or they will need a financial boost from their families. Meanwhile, the average age of a first-time buyer in London is 34 years old, with boroughs such as Barnet, Sutton, and Harrow rising the average age to 39 years old when in the rest of the UK is no more than 31.
Government schemes such as “Help to Buy”, aimed at young buyers, have also underpinned prices, but still only a 16% of 25 to 34 year-olds own the roof over their heads, compared to the overwhelming 53% in the 80’s. Andrew Mason, Lloyd’s Bank’s mortgage products director say “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”. However, despite the problems of getting on the “property ladder” Brits still dream of buying their own home, with 60% or renters intending to buy a house.
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