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First time buyers in London pay twice as much to get on the property ladder

It cost double to purchase your home if you are a first time buyer in London compared to anywhere else in the country.

A first time buyer pays on average £420,132 to buy a property in London compared to £210,515 in the UK according to the latest data from Lloyds Bank.

House prices in the capital have risen 64% or £164,338 in the last five years for first time buyers, far greater than the increase for the rest of the country up 49% or £69,246.

The most expensive borough for first time buyers is Westminster at £641,953 rising 49% over five years followed by Camden at £607,545 rising 30% in five years.

Andrew Mason Lloyds Bank mortgage products director said, despite the slowdown in London house prices the 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.

First time buyer numbers fall in London

The number of first time buyers has in the capital has fallen with the proportion of 17% of all buyers in 2013 to 12% in 2017, a five percent reduction to 42,983.

Although first time buyers has increased for six years straight across the country, in London it has fallen for three consecutive years.

The following table from Lloyds Bank shows the top ten boroughs in London and the change in first time buyer average house prices from 2013 to 2018.
Borough 2013
Waltham Forest £211,335 £409,977 94%
Haringey £271,998 £488,424 80%
Barking and Dagenham £173,146 £305,188 76%
Newham £213,263 £375,390 76%
Greenwich £214,045 £376,361 76%
Redbridge £236,248 £410,714 74%
Croydon £202,716 £349,817 73%
Bromley £233,710 £400,474 71%
Barnet £281,245 £480,182 71%
Lewisham £235,809 £400,756 70%
Waltham Forest increased 94% or £198,642 and first time buyers would need a larger deposit or use the Help to Buy scheme available on new build properties worth up to £600,000 where homebuyers only need a 5% deposit.

You can secure a loan up to 40% of the property value interest free for five years in London, with the balance of 55% being a mortgage at competitive interest rates.

Andrew Mason said, property prices drop as you head to the fringes of the capital and this gap is closing as house price growth in Outer London is continuing to increase at a greater pace than Inner London.

For home movers leaving areas with high property values in London to areas with lower values, they may have extra equity for a deposit to buy a larger home or can reduce their mortgage.

For remortgage buyers the rapidly rising house prices over the past five years give them an opportunity to release capital which they can use to improve their home, such as an extension, new kitchen and bathroom.

High deposits to secure your home

The typical deposit paid by first time buyers in London has increased greatly from £57,434 five years ago to £92,833 in 2018, a rise of 62% and is double than the rest of the country averaging only £39,668.

Camden demand the largest deposit in London currently averaging £175,844 in 2018 and Haringey has seen the biggest increase in deposits from £63,447 in 2013 to £131,827.

High property values in London have also seen mortgages increase from £198,360 in 2013 to £327,299 in 2018 which is also significantly higher than the national average of £170,847.

For London as a whole it is the borough of Waltham Forest which has seen the largest increase in house prices over the last five year climbing from £251,553 in 2013 to £462,799, an increase of 84%.

With higher house prices in the capital buy-to-let investors will look to outer London for affordable properties to help improve rental yields.

The largest change in value is for Westminster up £472,230 followed by Kensington and Chelsea up £444,192 and the average gain for all boroughs is £174,989.

Higher property values for older homeowners allows the equity release buyer to access wealth using a lifetime mortgage for home improvements, holidays of a lifetime or gift to a family member or friend.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.

Learn more by using the property value tracker chart, mortgage costs calculator and equity release mortgage calculator. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to repay an interest only mortgage or buy a more expensive home.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


    Equity Release - Equity Released from your home will be secured against it. Mortgages – Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it. Think carefully before securing other debts against your home. The information contained in this website is subject to the UK regulatory regime and is therefore intended for consumers based in the UK.


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