First time buyers in London 'need £70,000'
First-time buyers in London now require a cash pot of £70,000 to get on the housing ladder as property becomes increasingly unaffordable.According to real-estate advisor JLL, the sum is needed to cover the deposit, three per cent stamp duty and moving costs, the Telegraph reports.Loan-to-value mortgages currently stand at 82 per cent in London, meaning prospective buyers must find a deposit of around £50,000, which could deter talented staff from settling in the city.JLL says newcomers tend to buy a flat or terraced home worth an average of £280,000. This would incur stamp duty at three per cent, costing £8,400. Typical moving costs add up to between £10,000 and £12,000. "London house prices are underpinned by strong fundamentals, including strong employment prospects and expectations of future wage growth," said Adam Challis, head of residential research for JLL."There is such strong demand from young professionals to live and work in London that huge compromises in living circumstances are made. Strong rates of price growth are also driving more people to feel the need to buy now or miss out."The Mortgage Market Review, which will impose new rules later this week, is expected to result in a tightening of lending conditions. However, news of high prices and associated costs is likely to fuel concerns that housing in the capital is becoming unaffordable for local residents as cash buyers from overseas purchase new properties.Recently, Islington Council announced it would attempt to end the buy-to-leave trend it says is currently restricting housing supply in the borough. Such homes are often marketed overseas, bought as investments and left to stand empty.In the EC1 postcode, council data shows as many as half of recent developments have no-one on the electoral roll.In March, London mayor Boris Johnson encouraged developers to sign a concordat committing them to selling homes to Londoners before, or at the same time as, they are made available to overseas buyers.
--- Ends ---