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London first time buyer costs almost double in a decade

Property prices for first time buyers in London rise by 98% over the decade and deposits are more than double the national average.

Over the past decade first time buyers in London have seen house prices increase 98% or £229,739 to an average of £463,536 according to the latest research from Halifax.

Across the UK costs are higher over ten years by 69% or an average of £98,552 with house prices rising to £241,025 in 2020.

Compared to 2019 first time buyers have seen property values increase 7% over the year, Wales at the top rising 9%, the North East and Yorkshire & Humber up 8% with London and the South West up only 3%.

Drastic rise in deposits to buy a home

The amount first time buyers need for a deposit has increased drastically with London leading on £109,146 representing 24% of the purchase price and more than double the national average.

For home movers the gap between their current home and the next increases and therefore they would need a larger mortgage or bigger deposit to trade up.

This table from Halifax shows the change over 10 years in house prices and the deposit paid by first time buyers for regions in the UK to 2020.
Region House price Change Deposit
London £463,536 98% £109,146
South East £303,838 73% £53,993
East Anglia £228,004 66% £42,882
South West £225,176 51% £42,318
West Midlands £192,416 63% £34,445
East Midlands £187,525 68% £32,642
Scotland £154,449 42% £31,257
North West £169,642 57% £29,548
Yorkshire & Humber £161,933 53% £28,501
Wales £159,582 51% £27,565
North East £140,114 42% £24,279
Northern Ireland £143,040 21% £25,597
The costliest region to live is London followed by the South East where house prices are £303,838 requiring a deposit of £53,993 representing 18% of the property value.

Prices in the South East are 73% or £128,527 higher over ten years and this gives remortgage buyers the opportunity to release capital which they can use for home improvements.

Buyers are placing record amounts for deposits averaging £47,059 which is 25% higher than 2010 although as a percentage of property values this has decreased from 27% ten years ago to 20% today.

Older homeowners with considerable value in their property offer the equity release buyer access to cash using a lifetime mortgage to repay an interest only mortgage or even buy a more expensive home.

Most affordable region for buyers

Regions considered affordable is where the property values are no more than four times earnings.

Half of the most affordable in Scotland leading with North Ayrshire with an average price of £104,845 and a ratio of 3.2 times local earnings.

In England the most affordable region is Barrow-in-Furness with prices of £117,488 and Pendle with prices of £112,382 in the North West both with earnings ratio of 3.4.

For buy-to-let landlords the lower house prices in these regions means they need a smaller deposit or mortgage to buy this could mean improved rental yields after mortgage interest payments.

The least affordable regions are all in London with Brent requiring a ratio of 12.3 times local earnings for house prices of £495,963 and Oxford is third on the list with a ratio of 11.6 and prices of £424,712.

First time buyers living in London can save thousands due to changes in stamp duty with no tax to pay on properties purchased with values up to £500,000 valid until March 2021.

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 a buy-to-let investor.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to improve your quality of life or loft conversion.

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


Mortgage Best Buys

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

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

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