Another day, another piece of gloomy news for anyone aspiring to get their foot on the increasingly out-of-reach first rung of the housing ladder. First-time buyers may be behind half of all house purchases financed by a mortgage in 2017 so far, but the average price of a first home in the UK just hit a record high.
The average cost of a first home now stands at £207,693 across the UK – 50% higher than in 2012, according to Halifax's First-Time Buyer Review, as quoted in the Standard. Meanwhile, the average London property costs an eye-watering £410,000 – a 66% rise in five years.
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This means first-timers can expect to fork out an average of £33,000 on a deposit across the UK – a figure that sounds frankly quaint when compared with the £106,577 typically required in London, which works out as 26% of the average house price.
No surprises for guessing where the country's least affordable areas are. Yup, they're in the capital. It's by no means the flashiest nor the most sought-after London borough, but it turns out Brent is the least affordable place to buy a first house, with the average house price standing at £459,000, or 12.5 times greater than average local earnings.
The less well-heeled among us may also want to avoid Lambeth, the second least affordable borough. There average house price in the south-central London area is 12 times local average earnings at £458,883. House prices in Haringey in north London are similarly out of control, at 11.9 times higher than average earnings (£462,961).
On the more affordable end of the spectrum is Stirling in Scotland, where the average first home costs £136,181, or around 2.9 times local average earnings. In fact, seven of the 10 most affordable areas for first-time buyers are north of the English border. Meanwhile, in England, the most economical area is Copeland in the North West, where house prices are 3.2 times local average earnings.
Along with an increase in the typical first deposit, first-time buyers are also opting for longer mortgage terms, meaning the loan will be paid off over a longer period, accruing more interest. In 2007, nearly half of first-time buyers opted for a traditional 20-25-year mortgage, compared with just a quarter in 2016. Last year nearly six in 10 (56%) first-time buyer mortgages were for 25 to 35 years. Seriously, what will it take for the UK property market to be brought to heel?
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