First-time buyers priced out of London property market despite support
A recent analysis by Savills has shown that first-time buyers are unable to afford homes in London, even when assisted by government help-to-buy schemes – and still have to rely on higher levels of savings.
In a city where typical house prices and wage levels are already 66% higher than the national average, the continued increase in property prices in the capital means that those attempting to gain a foothold in the housing market are still dependent on high levels of savings. Even those in a dual-income household need a sizeable deposit to secure a home, and even then would still be priced-out of a third of London’s boroughs.
While the help-to-buy scheme has enjoyed a certain level of success outside of the south-east, its poor implementation in the capital has led to an extremely low uptake in applications as it fails to address the bigger issues.
“A buyer would need more than £40,000 for stamp duty and deposit,” said Lucian Cook, director of residential research at Savills, quoted by the company’s website. “That’s before solicitor’s fees and other associated costs. So clearly there still remains a deposit barrier.”
This latest news is the last in a long line of potential setbacks for those hoping to sell their London-based homes. Very few potential buyers benefit from government aid for reduced-price new-builds, and so the possibility of purchasing established real estate is almost out of the question. And as fears grow that the capital’s housing bubble could burst, many homeowners are facing the prospect of lowering their asking price to encourage a quick house sale.