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London house prices: average price of a first-time buyer home has risen by £28,000 in a year



New research on annual house price rises across the capital reveals that London's struggling first-time buyers have to find an extra £28,000 to buy a starter home.
£350,000: an Art Deco conversion one-bedroom flat in Denmark Road, Camberwell, with parking, is in a rare pocket of good value
The true extent of the financial challenge facing London’s first-time buyers is revealed today in a new study showing the price of an average starter home has risen £28,000 in a year.

This, in turn, means that young buyers seeking a shared-ownership deal will need to raise £67,000 — up £7,000 — simply to buy a quarter-share of a first home, according to exclusive research by Savills for Homes & Property.

Struggling first-time buyers should steer clear of Hammersmith & Fulham, Lambeth, Barnet and Ealing. All four boroughs have seen starter home prices leap 20 per cent in the past year — more than double the London average.

The average first-time buyer prices for every London borough

Values in Hammersmith & Fulham have risen from £400,000 to £480,000. This means a quarter-share would be £120,000.

In Lambeth, the average first time home now costs £330,000, up from £275,000 last year, with £82,000 needed for a quarter share.

Starter homes now cost an average £300,000 in Barnet, up from £250,000 and are £75,000 for a quarter-share. In Ealing, prices have jumped from £250,000 to £299,000, and a quarter-share will cost £35,000.

Sophie Chick, associate director in Savills residential research department and author of today’s report, said rising prices plus lenders’ demands for substantial deposits have left many first-time buyers trapped.

“They cannot find the deposit, but with the current low interest rates, owning a home is often within affordable levels.” 

Barking and Dagenham is the only borough where a property costs under £200,000. A typical first-time property costs £180,000, up from £162,000 a year ago. An average quarter-share of a property in the borough is now £45,000, up £4,500 in the past year.

As usual, Kensington and Chelsea is a no go area unless you are a rich first-timer. In the past year, an average property has increased to £740,000. 

The research is based on the annual change in the average price of starter homes in every London borough in the year to April – the most up-to-date figures available.

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