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

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

First time buyers shun London market

First time buyers shun London market

Category: Mortgages

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

MONEYFACTS ARCHIVE
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 It is now over 6 months old so the content may be out of date.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 Any products featured may be withdrawn by their provider or changed at any time.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

Homemover numbers fall for first time since 2011

The mortgage market enjoyed a record year in 2016, so it may come as a surprise to hear that the number of people moving home has fallen for the first time in five years, with fewer apparently taking advantage of the market.

2016: the best year for remortgaging since 2009

Remortgaging has certainly seen a surge in activity of late, helped in no small part by the dramatic drop in mortgage rates over the last year, so much so that 2016 as a whole proved to be the best year for the sector since 2009.

Homeowners underestimate remortgaging savings

Remortgaging has been enjoying a surge in popularity in recent months, and considering how much you could save, it’s a no-brainer! Unfortunately, many fail to realise the extent of potential savings, which could mean too few make the switch.
 
Close