If you want to buy a house in London by 2021 then you’ll need to save £2,300 every month for the next four years, according to a new study.
According to the National Housing Federation, the average cost of a 20% deposit on a home in the capital has risen to a whopping £113,000, despite the mean salary in the region being £34,000. The NHF states that buyers would therefore need an annual income of £130,000 in order to be able to afford a mortgage on the average home in London.
Though London’s more expensive boroughs inevitably inflate the average, the mean income of the city is still well below the cost of a mortgage for a home outside of these pricier areas.
Unfortunately those looking to rent in the capital aren’t much better off, with the average monthly cost having risen to £1,727. This means that renters in London are paying on average £20,724 for accommodation, which works out to 61% of their annual salary. This number rises for 16-24-year-olds, who spend on average 88% of their annual income on rent.
While rising mortgages is a problem across the UK, the high expense of living in London is creating major property problems in London specifically. According to research from PwC, over half of 20 to 39-year-olds will be renting from private landlords by 2025, with options for first time buyers being alarmingly thin. On top of this, British citizens pay the most for private rent in Europe, while only one in three rented homes are considered fit to live in according to research from Citizens Advice.
(H/T City AM)