By 2020 first time buyers in London will need a salary of £102,000 and a deposit of £138,000, says charity Shelter.

Research from the charity Shelter shows what a first time buyer will have to earn to get on the property ladder and secure a mortgage for a typical property by 2020, if prices continue to rise with current projections.

For first time buyers in London the average property price is £419,000 and need a deposit of £104,000. For the balance homebuyers need a mortgage from a lender of £310,000 and Shelter say the income required is £80,000.

By 2020 the price of a home for a first time buyer increases to £558,000 requiring a deposit of £138,000 and a mortgage affordable for those with an income of £106,000.

For the UK as a whole first time buyers will need to earn £64,000 by 2020 to buy a property worth £270,000 with a deposit of £46,000.

London house price growth

According to Shelter house price growth in London has been strong over the past five years rising by 56% and has exceeded all other areas in the UK.

For remortgage buyers these higher prices give you an opportunity to release capital which you can use to improve your home.

The following shows the top twenty boroughs in London for property price growth between 2010 to 2015:

Area	Property Prices	5-Year Changes
Lambeth	£600,496	74%
Hackney	£659,623	73%
Waltham Forest	£418,755	71%
Westminster	£1,075,683	67%
Hammersmith and Fulham	£850,494	67%
Lewisham	£451,167	66%
Southwark	£612,797	66%
Wandsworth	£612,797	63%
Haringey	£582,626	63%
Islington	£705,975	61%
Merton	£511,176	57%
Kensington and Chelsea	£1,366,907	54%
Ealing	£490,623	54%
Camden	£857,892	54%
Tower Hamlets	£543,903	53%
Richmond Upon Thames	£660,689	51%
Greenwich	£396,489	49%
Bromley	£422,770	49%
Croydon	£368,851	48%

For the UK the rise is 38% with an average property price now of £220,000 and the lowest is the North east with 17% higher prices.

In London houses price growth is 15 times greater than wage growth followed by the South East with 8.4 times although there can be significant local variations.

The lowest is the North East where house price growth is 1.9 times higher than wages with the average of the UK is 5.6 times.

Higher property values in London has benefited older homeowners as equity release buyers can access cash using a lifetime mortgage and give to a child or grandchild the deposit on a home.

Housing shortage making it harder to buy

Campbell Robb, Shelter’s chief executive said the country’s housing shortage over the past five years has helped to raise house prices six times faster than the average wage.

The cost of a home for a first time buyer or home movers has diverged from the average salary for different regions.

It is unlikely income can grow fast enough to keep up with the rise in house prices and people on ordinary incomes will be locked out of owning their own home.

The situation seems to be worsening, says Mr Robb, and generation rent may be forced to give up their dream of owning a home.

With competition from buy-to-let investors and reduced supply of suitable properties, prospective first time buyers must continue renting and saving for a bigger deposit.

The government intends to build 200,000 new starter homes to tackle the housing crisis and offer a 20% discount to first-time buyers.

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.

Learn more by using the property value tracker chart, mortgage cost calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.

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.

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