First time buyers paying more for a home in London, new analysis shows
First time buyers in the UK are still paying more to get on the housing ladder despite prices falling in areas of London, new research suggests.
The analysis by Gatehouse Bank cites figures showing that prices have increased by 4.3% in areas of the capital popular with first time buyers despite values falling overall by 1.9% throughout the city.
It suggests that the trend is creating two different markets For example, in Barking and Dagenham, one of the most affordable areas in the capital, the average price paid by first time buyers rose 2.91%, up from £276,701 to £284,751 between March 2018 and the same month in 2019.
In Hackney prices have increased by 5.4% over the same period while they have increased by 0.67% in Hillingdon, by 2.45% in Hounslow, by 3.61% in Merton, by 4.87% in Newham and by 0.58% in Bexley, all locations popular with first time buyers.
The only other parts of the capital to see prices rise for first time buyers were Richmond upon Thames with a rise of 2.12% and the City of London up 16.24%, was this was likely due to low sale volumes. In the nine boroughs to see a rise, the average price of homes bought by first time buyers went up 4.3%.
The biggest drop in the amount paid by first time buyers was in Kensington and Chelsea, where the average price fell 16.69%, from £1,217,182 to £1,013,999, a drop of more than £200,000.
‘The trend for the London property market over the last year has been all about falling prices and most people would expect the one silver lining to be that first time buyers would find it easier to get on the housing ladder,’ said Charles Haresnape, chief executive officer of Gatehouse Bank.
‘Sadly that’s not the case. It is counter intuitive but in many areas popular with first time buyers, the situation is actually getting worse. A young couple hoping to buy in Hackney today would have to find an extra £27,310 to purchase a property compared to a year ago,’ he explained.
‘It could be that the shortage of affordable housing for first time buyers is forcing up prices in areas where it is generally cheaper to get on the housing ladder. This continuing disparity means first time buyers are experiencing a two speed London, with prices moving in different directions as you cross borough boundaries,’ he added.