FirstRungNow: Deposits increase for first time buyers
Thu 29 Aug 2013
The deposit required for first time buyers has increased significantly, according to new research published by the Council of Mortgage Lenders (CML). The CML figures show that first time buyers in London typically need to purchase a mortgage of nearly 200,000 to get on to the property ladder.
However, for the more expensive areas, a mortgage could set a buyer back by around 1 million, in places such as Chelsea, Westminster and Kensington. In the capital, the average first time buyer pays 192,640 for a mortgage, with an average income of 52,130.However, in the UK as a whole, the national average full-time salary is 26,500.It is also the norm for buyers to put down a 25 per cent deposit for a property.
These new figures coincide with another report published recently by Marsh & Parsons which shows that the price of property in the capital is increasing. Its analysis reveals that properties in prime London have risen by 14 per cent during the last year to reach a current average value of 909,203.According to the forecast, if prices continue to increase at their current rate, the average price of a two-bedroom property in the city will be 1 million.
Brian Murphy, head of lending at the Mortgage Advice Bureau, said however that the high prices, have not failed to encourage people to invest in property.He added: "Access to the property market is clearly improving, despite warnings of an impending housing bubble Although property prices are on the rise, competition between lenders has opened up the market for first time buyers with growing product choice and competitive rates.
The early success of the government's Help to Buy scheme, and buyer participation in the initiative, also indicate consumer opinion of the market is favourable."But he urged lenders to "act responsibly" and ensure that house price rises do not undermine the support for first time buyers to get onto the market.