First time buyers in London see prices rise on average by 67% since 2012

House prices for first time buyers in London have increased by an average of 67% with some parts of the capital seeing even higher increases, according to new research.

The steepest rise has been in the borough of Waltham Forest where prices for those getting on the housing ladder have increased by 93% from an average of £212,629 in 2012 to £409,491 in 2017, the data from Lloyds Bank shows.

The boroughs recording the next biggest gains are Newham, up 92% to £359,212 and Greenwich up 91% to £382,945 but all of these borough, which are next to each other, had average prices well below the London average five years ago.

Westminster has seen the smallest rise in prices since 2012 with an increase of 28% to £595,568, less than half the gain across London as a whole and significantly below the UK average of 50%.

The borough of Hammersmith and Fulham has seen first time buyer prices rise by 36%, Richmond-upon-Thames and Camden up 47% and Islington up 49%, and were the only other boroughs to experience an average first time buyer house price rise of less than 50% between 2012 and 2017. Camden has now become the most expensive borough for first time buyers with an average house price of £602,080.

At the other end of the scale, Barking and Dagenham has remained the least expensive borough for first time buyers despite a 74% rise in average prices since 2012. The borough is the only one where the average price paid by first time buyers is below £300,000 at £292,446 while Havering with an average of £317,168 and Bexley £324,910 are the next least expensive boroughs for first time buyers.

Andrew Mason, Lloyds Bank mortgage director, pointed out that it means that monthly mortgage payments and deposits have increased substantially, making it increasingly difficult for many young people to buy their own home, and as a result the bank saw a 5% drop in first time purchases last year.

The research also shows that average mortgage taken out by a first time buyer in London has increased by 71% from £185,538 in 2012 to £317,253 in 2017. The average mortgage in the capital is nearly double that for a new first time buyer in the UK as a whole at £168,296.

The average first time buyer mortgage ranges from £461,632 in Westminster to £241,520 in Barking and Dagenham where the average mortgage has risen by over £100,000 over five years despite the borough remaining at the bottom of the table in terms of mortgage size. The average mortgage in Westminster increased by £104,763 between 2012 and 2017.

In monthly terms, the average mortgage payment paid by a new first time buyer varies by almost £1,000 from £2,017 in Westminster to £1,055 in Barking and Dagenham. The average monthly mortgage payment across London has risen by £447 from £939 in 2012 to £1,386 in 2017. This is more than double the UK average increase of £181 from £555 to £735 between 2012 and 2017.

The average deposit put down by a first time buyer in London is highest in Hammersmith and Fulham at £190,518. The average deposit is also high at £150,331 in Camden while the lowest are £50,926 in Barking and Dagenham, £52,745 in Havering and £53,753 in Bexley.

The average deposit in London has increased by over £30,000 over five years from £57,393 in 2012 to £87,853 in 2017 and is now more than double that put down by a first time buyer across the UK at £37,570.

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