The data reflects the growing difficulties first-time buyers in London face trying to get onto the property ladder.
LONDON — The average first-time buyer deposit in London could soar to an eye-watering £250,000 within a decade, according to new research from broker L&C Mortgages.
The firm said average deposits in the capital could rise from £140,000 this year to £245,000 by 2027, which represents a 75% rise. Nationally, average deposits could rise from £52,000 to £81,000 in the same period, nearly a 60% rise.
ONS House Price Index to extrapolate what the average dwelling price and mortgage advances were given to first time buyers in the UK's 17 key cities over the past 20 years. From the gap between the average dwelling price recorded and the average mortgage advance received we were able to calculate what deposits were put up front by first-time buyers.
While the £140,000 figure may seem high, it is not far off other estimates of the current average deposit. Halifax calculated in July that Londoners are putting down an average deposit of £106,577 to get on the housing ladder. The bank said the average price paid by a first-time buyer in London now stands at around £410,000.
The data reflects the growing difficulties first-time buyers face trying to get onto the property ladder, particularly in London, where high demand and a shortage of housing stock means price growth has outstripped the rest of the UK for over two decades. Data from Hometrack found the average house price in the capital is already 14.5 times the earnings of an average Londoner, the highest level on record.
Here's how L&G's predictions break down for other UK cities: Mortgage costs are expected to rise due to higher house prices and because higher prices usually mean that the proportion of the dwelling value that needs to be covered by a deposit increases in order to make the mortgage payments affordable.
Figures from the Office for National Statistics earlier this week show that the value of land in the UK has grown fivefold since 1995 and is the country's most valuable asset, worth an estimated £5 trillion.
The average house price in London was £484,000 in August 2017, according to the Office for National Statistics, compared with a UK average of £226,000. Estate agents Savills forecasts that prices will dip 2% next year before returning to robust growth.