For first time buyers the top ten least affordable homes are all located in London with the highest deposits paid, says the Halifax.
Halifax have report shows the top ten least affordable properties for first time buyers are in London with Brent leading with an average house price of £457,014 and 12.5 times local annual gross earnings.
The next least affordable place is Hackney at 12.0, Haringey with 11.6, Hammersmith and Fulham at 11.0 and Islington back in tenth position at 10.2 times income.
The following Halifax table shows the top ten least affordable local area districts in 2016 based on multiples of earnings:
| London Borough | Multiples of Earnings |
|---|---|
| Brent | 12.5 |
| Hackney | 12.0 |
| Haringey | 11.6 |
| Hammersmith and Fulham | 11.1 |
| Waltham Forest | 10.9 |
| Lambeth | 10.8 |
| Harrow | 10.6 |
| Ealing | 10.5 |
| Newham | 10.2 |
| Islington | 10.2 |
Across the country there has been a 10% increase in first time buyers to 154,200 in the first half of 2016 from 140,500 for the same period last year.
This is despite the UK average house price for first time buyers increasing by 12% from £178,399 a year ago to almost £199,414.
For remortgage buyers living in London the higher property values give them an opportunity to release capital which they can use to improve their home such as adding an extension or new kitchen.
Deposits double since 2007
The average deposits was £33,960 in May 2016 representing 17% of the property value and more than double the figure of £16,400 in 2007.
Not surprisingly the largest deposit required was Greater London with an average of £95,693 and was 25% of the purchase price.
The following Halifax table shows the breakdown of average house prices and deposits for first time buyers in different regions for 2016:
| Area | House Prices |
Average Deposits |
|---|---|---|
| Greater London | £384,617 | £95,693 |
| South East | £257,481 | £47,415 |
| South West | £190,144 | £35,800 |
| UK | £199,414 | £33,960 |
| East Anglia | £187,231 | £33,837 |
| West Midlands | £153,546 | £23,420 |
| North West | £138,354 | £22,677 |
| East Midlands | £146,053 | £22,393 |
| Scotland | £135,479 | £21,751 |
| Yorkshire and the Humber | £132,915 | £19,864 |
| Wales | £128,758 | £18,789 |
| North | £120,554 | £18,095 |
| Northern Ireland | £110,675 | £16,607 |
The highest average prices are for Greater London with a house price of £384,617 and mortgage amount of £288,924.
First time buyers can receive help from older homeowners as equity release buyers can access wealth using a lifetime mortgage and give to a child or grandchild the deposit on their first home.
The lowest house price is for Northern Ireland with £110,675 and average mortgage value of £94,068.
Most affordable homes in the north
Five of the top ten most affordable places for first time buyers are in Scotland with East Dunbartonshire the best with an average house price of £97,089 and 2.6 times.
Copeland in the North West is second with 2.9 times, East Renfrewshire with 3.0 and West Dunbartonshire at 3.1 times local annual gross earnings.
Chris Gowland, Mortgage Director at Halifax said the numbers of first time buyers remain below previous peaks reached in 2007 of 181,500, levels have exceeded 100,000 since 2012.
The number of first time buyers has increased more rapidly than home movers. This is likely to have been assisted by government measures including the Help to Buy scheme.
As a proportion of all mortgage financed home purchases first time buyers have increased from 38% in 2011 to 47% in 2016.
First time buyers are facing escalating house prices and deposit sizes, however, record low mortgage rates continue to make buying seem like a more attractive option than renting.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage cost calculator and equity release mortgage calculator.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even give to a family member.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
