London first-time buyer deposits hit £115k — which can buy an entire house elsewhere in the UK – Katar Investments

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London first-time buyer deposits hit £115k — which can buy an entire house elsewhere in the UK

An average starter home in the capital costs almost £420,000, with the average deposit an eye-watering £114,952, or 27 per cent, according to the Halifax.

This deposit alone would comfortably buy outright a smart three-bedroom terrace house in the seaside resort of Scarborough a two-bedroom cottage in a Midlands village, or a smart one- or two-bedroom flat in Norfolk or parts of Essex.

Yet despite the prohibitive entry costs, the number of London first-time buyers keeps rising, with the most fortunate able to borrow heavily from parents.

More than 150,000 got on to the property ladder in the last year, compared to 72,700 in 2009 in the depths of the recession. Just over half of all mortgage applications made to Halifax are from first timers.

As well as handing over large cash sums to help their children on to the ladder parents are increasingly acting as accidental — and low-paid — landlords, the research shows.

Just over a third (35 per cent) of 18- to 34-year olds intend to save up for a deposit by remaining at home until they can afford to buy a place of their own, sidestepping the private rental sector altogether.

The decision to stay on in their childhood bedrooms well into adulthood could be a sensible one, since London rents are rising steeply.

The annual rent of an average London property is almost £20,000 per year according to the latest HomeLet index, published this week. It found that the average London renter pays £1,615 a month, up more than three per cent in the past year.

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