A typical first-time buyer in London will have to save 31 years to raise a deposit on a home, according to a new analysis.
Figures from Cornerstone Tax, based on Office for National Statistics (ONS) data, suggests that homeownership in the capital is out of reach for most who do not have access to additional money from their family.
A survey conducted by the tax business also found that 62% of Londoners say that on their current salary, they can’t afford to save for a deposit. Meanwhile, 39% of those in the capital said that they have had to spend money that they had saved for a deposit because of the cost-of-living crisis.
David Hannah, Group Chairman of Cornerstone Tax, said: “Our latest findings illustrate a stark reality on the ground of our capital’s housing market, with the dream of homeownership remaining outside the grasp of many would-be buyers.
Hannah added that a lack of housebuilding in recent years has made the crisis worse, but noted that the Conservative Party appears to be finally taking steps to address that issue.
He said: “Whilst it’s reassuring to see the Conservatives admit fault on their historically lacklustre approach to housing, pressure must also be directed towards Andrew Bailey and the Bank of England. Interests rates are currently sitting at a fifteen-year high and this is having an indisputable impact on the affordability of mortgage deposits for first-time buyers.”
The data comes just days before Jeremy Hunt delivers the final Spring Budget before the General Election. One possible measure to be included in the Budget is the introduction of 99% mortgages, drastically reducing the amount that would be needed for a deposit. However, some experts have warned that mortgage affordability will remain a challenge, and that the scheme presents new risks for borrowers.
