SWL’s James Pozzi investigates how sky high house prices in Merton are affecting buyers.
It was once said there is no greater thing to aspire to than owning your own home.
And as is still the case, the desire to get on the property ladder has never been greater for many people.
But for some with these aspirations, it is now a forlorn hope.
For many residents hoping to become first-time buyers in the affluent, leafy South West London borough of Merton, there is a feeling that such notions are improbable.
One only has to look in the windows of the area’s estate agents to see houses with values of £4million, and rental prices peaking at £12,000 a month.
A report published last week by Merton Council states the required income for first-time buyers’ looking to get on the property ladder in the borough of Merton is approximately £60,300 per annum.
The figure, which would drop to about £53,600 for buyers in a position to offer a 20 percent deposit, suggests the average price for a first home in the borough is around £230,000.
Even in a desirable area like SW19, these figures make for startling reading and go some way to illustrate why the national culture of home owning is now changing in favour of renting.
The UK rental market was recently described as enjoying ‘near perfect conditions’ by the letting agency Belvoir.
This approach to occupying property follows Germany and other countries in Europe, where renting is common practice.
Being aided by the advantage of more affordable prices and bigger variations in letting options, the incentives are far greater for Germans to rent rather than purchase.
Yet the affordability issues indicate the change in culture has been brought about by necessity rather than choice.
Glen Smallwood, who bought a two-bedroom property just off the Broadway in 1996 for £130,000 before selling it in 1999 at a profit, expects the house to have since tripled in value.
Mr Smallwood states that he feels fortunate to have got on the ladder at a time when house prices were more reasonable and doesn’t believe it is something he would be able to do in today’s climate.
“I sympathise with anyone trying to get on the ladder in today’s market”, he said.
In buying the house at the age of 27, he believes he represents the last generation entering the property market without needing an above average salary.
“Just getting the money for a deposit is a huge ask. It is no wonder people are renting now as an alternative, it’s more cost effective and realistic to people’s salaries,” he added.
However, those who justify buying property as giving you something to show for your money is a notion Mr Smallwood still agrees with.
Haart Letting Agency agent Ben Mahne believes there are many factors that give explanation for the rises, such as outside investment from abroad and location demand.
“The buying market in London is actually growing with people still having a desire to take ownership,” he said.
“This would be surprising to many, but the London markets rarely slow down to the extent of others in the UK.”
But Mr Mahne was quick to warn of a forthcoming downturn for the buyer’s market, predicting a double-dip recession within the next 12-24 months as a real possibility.
Local resident Martin Davies, who lives in a two-bedroom property in Wimbledon, believes the value of housing in the UK is indicative of the increase in general living costs.
“I am a working professional who is living on a decent salary, but the burden of a mortgage is not something I want to commit to right now, and probably not for another ten years,” he said.
“I am quite happy to rent for the foreseeable future, as I pay enough for all the other demands of life,” he added.
Retail worker Dariusz Kusczmecizk, a Morden resident originally from Poland, thinks house buying in this country will soon be something for the rich.
“Finding the money for a deposit or securing a loan would be very difficult for me,” he said, explaining his intentions were to eventually return to his home country and buy there.
“I would love to own a house in this country but it is simply unaffordable.
“In Poland it is frightening to see what you could get for a lot less money.”