It’s hardly a revelation that getting a foot on the property ladder in London is tricky. Prices in the capital have always been steeper than other parts of Britain, and it’s a difficult time for young people to buy their first properties. But new figures released by Lloyds Bank have come as a shock to many, as the gap between London and the rest of the UK continues to widen.
The average price of a first time property in London has risen by two thirds in the past five years and is now tipping the scales at a huge £420,132 – that’s £209,617 higher than the national average. The cost of deposits has spiked by 62% too, with first timers paying out as much as £92,833 for their initial payment. It’s not just the stereotypically affluent areas that are showing the biggest prices either. Camden is coming in with the biggest deposits, while Haringey has also seen a huge increase of lump sums in recent years.
These astronomical price tags have led to a drop in the number of people buying in the capital, with agents seeing a drop of 5% in the past five years. “However shocking the figures might be, it still works out cheaper to buy a London property than to rent one, with the average home owner paying out around three and a half thousand a year less than tenants” says Assetgrove.
The average first time buyer in London is now 34 years old; a far cry from the twenty somethings just starting out. And while it used to be easier to bag a bargain in the suburbs and on the outskirts of the city, the Crossrail project has led to a hike in property values all along the line. “This is great news for homeowners who bought their properties decades ago, but a nightmare for anyone taking their first forays into ownership” says Robert Holmes.
The average house price is now eight times more than the average UK salary, and thirteen times more in London. There’s clearly a housing crisis and a need for more affordable housing, which the government claims to be tackling. They’ve pledged to build an extra 300,000 homes a year, but progress is slow. “There’s currently a backlog of 3.91 million homes in England, and this lack of stock is impacting on the cost of existing properties” says Andrew Reeves.
With a rapidly expanding population, a huge disparity between the cost of living and the average salary and so many people struggling to get a foot on the ladder, London and the rest of the country is seeing a housing crisis the likes of which hasn’t been seen before.