My First Property

Buying Your First Home In London

It's not good news for first-time buyers in the London area - a recent report has stated that first-time buyers will need a whopping salary of over £100,000 to be able to get a mortgage on a property by the end of the decade. And on top of that they'll need a deposit that's also well over £100,000, since it is predicted that the average price will be over £550,000 per property in the capital by that time, an eye-watering figure.

And it's not great news for first time buyers around the country, who will face the fact that the average price of a home in the UK will be well over the £250,000 mark by that time. Sobering stuff indeed for those trying to get on the property ladder but finding that the combination of high rents and salaries that are not growing very quickly make the dream of home ownership just that - a dream - and an ever more distant one at that.

If this turns out to be true and there is no correction to the market, then it means even those with well-paid jobs in the city could be priced out of the market and literally just city workers such as investment bankers would still be able to afford a home.

The underlying problem is of course easy to spot - house prices are rising much more quickly than the average wage is going up, which clearly means that it is getting harder and harder to buy as the house prices become a higher and higher multiple of salaried income, effectively making it impossible for those on all but high salaries to be able to buy. Combining this with the fact that rents are high, partly because so many people have to rent rather than buy, this means it is harder to save a decent sum each month as such a chunk of income is going in rent. Meanwhile those house prices keep on going up.

All of which means that the earlier you can plan and start saving as a future first-time buyer the better, and you should also take advantage of any help available, such as first-time buyer mortgages and of course Help To Buy ISAs too which will help you save towards your mortgage deposit.

As you may have heard, the state adds 25% tax-free to the contents of your Help To Buy ISA when you eventually use it to buy a home - which could be a very nice little extra indeed of up to £3,000.

More first-time house buying articles:

  1. Property Checklist for First Time Buyers
  2. Fixed Or Variable Rate Mortgages
  3. Decorating Your First Home: 10 Budget-Friendly Tips
  4. Buying a Leasehold Apartment
  5. Finding a Bargain Property

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