Buyers looking to live in London face a 121 year wait on average.
That was the headline-grabbing figure from buy-to-let platform Property Partner this week based on average salaries and prices in the capital.
Researchers analysed the average price of a flat in each of London’s 33 boroughs and how long it would take a person to save up for a deposit assuming they secured a mortgage of four times the average London salary and saved 10% per year.
Based on Land Registry data, they found it now costs more than £457,000 for the average London flat.
Using the ONS average salary of £34,320 in London, researchers said the deposit needed to buy the property, assuming the first-time-buyer secured a mortgage of four times the average London salary, would be a whopping £320,505. Or would it?
You can view their calculations for different boroughs below, but bear in mind the limitations.
The research doesn’t take savings interest, however little, into account and also doesn’t consider that buyers would have different loans-to-value on a mortgage.
For example, no-one would really be required to pay a £320,505 deposit on a £457,000 home for a mortgage as this works out as a 30% LTV home loan.
In reality they could go for a 70% LTV mortgage, meaning they require a 30% deposit of £137,100. That is even before you consider higher loans-to-value.
Comments are closed.