Home ownership dream: Londoners in their twenties believe they will have to leave the capital to buy a home, finds poll

Half of renters in their twenties want to buy before they hit 30, mostly because they desire to "pay into their own home rather than line a landlord's pockets".
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Lizzie Rivera30 November 2017

The stamp duty relief announced for first-time buyers in November's Budget will have "little impact" on young people hoping to buy because the biggest barrier to home ownership is still the deposit, according to a new report.

Flat and house-share website SpareRoom reveals that as the average price of a London starter home has reached £422,000 - 15 times more than the average salary - the dream of home ownership is increasingly out of reach for most first-time buyers.

Across the rest of the UK, homes are a more affordable £190,700, but this is still seven times the average wage. Mortgages can usually only be obtained for up to four times annual earnings, which makes buying alone impossible.

Although the Bank of Mum and Dad has had to play a much greater role for first-time buyers in recent years, the survey also found that just 37 per cent of people hoping to buy anticipated receiving any help from their parents.

Table: London's 10 cheapest postcode areas for room rentals

No.  Postcode area Average room rental cost
1 Abbey Wood, SE2 £515
2 Manor Park, E12 £534
3 Thamesmead, SE28 £538
4 Winchmore Hill, N21 £542
5 Lower Edmonton, N9 £547
6 New Southgate, N11 £553
7 Forest Gate, E7 £554
8 Plaistow, E13 £555
9 East Ham, E6 £556
10 Catford, SE6 £558

As such, 93 per cent of London flatsharers in their twenties believe they will probably have to leave the capital to buy a house and almost as many (87 per cent) across the UK are facing the prospect of leaving the town or city they live in.

SpareRoom director Matt Hutchinson says: “People in their twenties are putting too much unrealistic pressure on themselves to get on the property ladder. If 87% of people think they’ll have to move to another area in order to buy, then our housing market is failing us.”

First-time buyers serious about getting the best value for money should replace their dream of living in Brighton with Southampton, Bristol with Plymouth and London with Norwich if they want to find an "affordable" home, according to recent research by Post Office Money.

Half of renters in their twenties want to buy before they hit 30, mostly because they desire to "pay into their own home rather than line a landlord's pockets".

The SpareRoom survey reveals that 86 per cent of twentysomethings in Britain want to invest in a property at some point.

However, the chances of doing this are increasingly slim, even outside London, where it now takes 25 years for first-time buyers on an average salary of £27,600 (take-home pay of £1,837 a month) to save for the average deposit of £33,000, according to calculations by the website using ONS wage data, Halifax mortgage figures and the UK's average savings rate of 5.9 per cent.

This jumps to an interminable 68 years for those hoping to buy in London, where the average deposit is now £107,000.