First time buyers shun London market - Mortgages - News - Moneyfacts


First time buyers shun London market

First time buyers shun London market

Category: Mortgages

Updated: 05/03/2010
First Published: 05/03/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The number of first time buyers looking to purchase property in London has fallen significantly in 2010 so far, as rising prices have hit demand.

In January 2009, first time buyers comprised 17 per cent of new buyer registrations, according to Marsh & Parsons. However, that proportion fell to just ten per cent in January this year, and below one in ten in February.

Rather than the end of the stamp duty playing a part in smaller numbers of new buyers – the vast majority of properties in the capital are priced above the lower threshold – it appears that values have simply increased too much for young buyers to consider.

Between January 2008 and April 2009 house prices fell by almost a third (30 per cent) in some parts of London.

This increasing affordability led to a large increase in demand from first time buyers.

This trend was illustrated by almost one fifth (19 per cent) of new buyer registrations being made up by first time buyers in August last year.

However, a 13 per cent increase in values has added an average of £40,000 to house prices in London, deterring potential buyers looking to establish a position on the property ladder.

"Central London may not be typical first time buyer territory, but it's little wonder why," said Peter Rollings, managing director of Marsh & Parsons.

"Mortgage lenders now typically require a 25 per cent deposit from first time buyers, meaning they would need to put down over £84,000 to purchase the average London property – realistic for only the tiny minority with substantial parental assistance."

Recent figures from the Land Registry found that the average house price in London was £336,212 in January, compared with a nationwide average of £165,088.

Find the best mortgage for you - Compare first time buyer mortgages or take a look at our best sellers mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Halloween horrors that put people off a home

Halloween is just around the corner, and many people will be getting their homes ready for a night of spooky fun. However, if you’re trying to sell your home, there are some real-life horrors that could put people off…

Londoners could be saving for a century to buy

We all know how expensive property can be in London and how tricky it is to get on the ladder, but the figures could still come as a shock, with a study finding it could take more than a century for the typical Londoner to save a deposit.

85% of remortgagors benefit from lower rates

Mortgage rates are among the lowest ever recorded, and in the case of fixed rates, they just keep falling! This means it’s never been cheaper to fix your mortgage rate for the long term, and unsurprisingly, remortgagors are taking advantage.