New research reveals that a first home in London costs an average of £367,990 and requires buyers to raise a deposit of £91,409.
The study by mortgage lender Halifax also shows the number of people in the UK getting on the property ladder in 2015 slipped back for the first time in four years.
The number of first-time buyers who took out a mortgage on the property dropped 0.5% in 2015 to 310,000 when compared with the previous 12 months.
In line with the need for larger deposits, there has been a marked increase in the proportion of loans arranged over a period exceeding the traditional 25-year term.
Halifax reports that average deposit for first-time buyers rose 13% from £29,094 to £32,927 in 2015.
Since the property market reached its last peak in 2007, the average first-time buyer deposit has risen by 88% from £17,499. At that point, loans of more than 100% of a property’s value were available from some lenders.
In 2007, 16% of first-time buyers took their loans out over 35 years, but by 2015 that had risen to 26%. The share of mortgages taken out over 20-25 years fell from 48% to 30% over the same period.
Craig McKinlay, mortgages director at Halifax, says: “Although the average price of the typical first-time buyer home has grown by 10% to £190,180 in the past year, the number of buyers taking that first step onto the housing ladder has been supported by record low mortgage rates, rising employment and real pay growth.”
Buyers in Northern Ireland pay £108,542 for a first home, while similar properties in south-east England cost £242,111.
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