Lloyds Bank has revealed the sharp rise in the average mortgage loan granted to first-time buyers purchasing properties in London in recent years. In 2012, the average amount borrowed was £185,538. Fast-forward to 2017, and the figure has shot up to £317,253. That is an average increase of £131,715, or 71% over just five years. Would-be buyers in London must also prepare to foot the regular payments for mortgages worth almost twice as much as those taken out elsewhere in the UK. This shows the stark contrast between buying property in London, and looking elsewhere in the UK, as well as the difference between today’s mortgages and those of just a few years ago. The contrast between the biggest and smallest mortgages in London boroughs There is also a significant difference of more than £200,000 between the average mortgage in the most expensive borough to that granted in the cheapest borough. Westminster is responsible for the largest average mortgage in the capital, at £461,632. In stark contrast, Barking and Dagenham comes in at the cheapest level, although cheap is perhaps not an accurate word. In this part of East London, the average mortgage is far lower at £241,520. However, this is still more than £100,000 higher than the average for the borough in 2012. Even this doesn’t represent the biggest rise for those in London who have managed to get on the housing ladder in the past five years. According to the research, the biggest challenge has come to those living in Waltham Forest. The average amount for a mortgage in this area was £212,629 in 2012. Today, that figure stands 93% higher at £409,491. The neighbouring boroughs of Newham and Greenwich come next in the top ten, with Newham seeing a 92% rise in the average mortgage granted, and Greenwich almost as high at 91%. Westminster may have the biggest mortgage, but it has the smallest change in prices We have seen how Westminster came out on top with the largest average mortgage amount of all the boroughs in London. However, it had by far the lowest rise over the past five years, with an increase of just 28% for first-time buyers. This is still a significant rise, however. What does the future hold for first-time buyers in the capital? Clearly, with prices rising sharply over the past five years, first-time buyers have had to stump up far more cash than was the case in the past. It does make one wonder how high the prices can go before first-time buyers are largely priced out of the market altogether. We have already seen how difficult it has become for people trying to get onto the housing ladder for the first time. It is less common for people in their twenties to purchase their first home, and many rely on their parents to stump up some cash to help with deposits, too. This research indicates harder times may be ahead, too.
Menu
