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FIRST TIME BUYERS IN LONDON FACE ‘WORST EVER’ STRUGGLE
For case studies of would-be first time buyers struggling to get on London’s property ladder, please contact the Shelter press office.
NEW research by housing charity Shelter shows it is 105 per cent harder for first time buyers in London to climb onto the property ladder than it was ten years ago.
The shocking report, by Shelter’s ROOF magazine, shows first time buyers in almost every English region face the most difficult struggle ever to secure their first home.
The annual ROOF Affordability Index assesses housing affordability by comparing mortgage costs against household incomes.
The latest figures show the gap between what people can afford and the cost of housing is growing.
Shelter chief executive Adam Sampson said: “These figures show the gulf between those who can afford to buy and those who can’t is widening in the capital at an alarming rate. For first time buyers, the housing ladder is becoming a housing tightrope.”
He warned: “Buying a home is becoming an ever-more distant dream for first time buyers and as housing becomes increasingly unaffordable, repossessions are likely to spiral and more families will face the nightmare of homelessness.”
Only two regions, the South East and the East Midlands, showed slight improvements, while the other seven regions - North East, North West, Yorkshire and the Humber, West Midlands, the East, South West, and London - show crippling rises.
The Index’s main findings are:
The Index for London stands at 192.5, compared with 94 in 1996, meaning it is 105 per cent harder for first time buyers in 2006 than it was ten years previous, and the hardest it has been since the index began in 1994. Average mortgage repayment costs for would be first time buyers in London swallowed-up around 26 per cent of the average household’s income in 2006, compared to 12.5 per cent in 1996. The average first time buyer property in London costs around £237,000 in 2006 compared to around £67,000 ten years ago. The average monthly mortgage repayment in London is around £1,230 against around £372 in 1996.
Mr Sampson added: “Spiralling house prices are forcing first time buyers into taking drastic measures to get onto the housing ladder, like signing up to lifetime mortgages at six or seven times their salary.
“It’s no wonder mortgage arrears and repossession problems seen by Shelter have more than doubled in the last two years, and we received more than 70,000 hits on our repossession web pages in 2006”
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