The rate of first-time mortgage buyers in London hit a decade-low in 2023, according to data from the Office for National Statistics.
Prospective buyers are increasingly looking to regions outside the capital, as first-timers are being priced out by disproportionate inflation and an evolving work climate.
Between 2013 and 2023, 20 of London’s 34 local authorities – nearly 60% – recorded their lowest rate of first-time buyers, compared to only 28% of local authorities across the UK.
One of those who made the leap is Oliver Slumbers, 28, who works as a research engineer at tech company Helsing, relocating from London to Surrey with his girlfriend.
He said: “When looking around, we just wanted somewhere with a relatively affordable, sub-45 minute, commute into central London.
“None of these criteria were particularly reachable in our price-bracket within London.”
House prices in the capital are no longer increasing as rapidly as elsewhere, suggesting that the long-accepted reality of London’s chronic unaffordability doesn’t explain the decline alone.
According to the UK House Price Index, the average property price in London increased from £376,865 to £549,112 from December 2013 to 2023, representing a 45.7% increase.
Conversely, that number has risen from £163,942 to £256,177 across the UK as a whole, a mammoth 56.3% growth.
Since the pandemic, many companies have adopted a hybrid work model, and employees are spending more time at home than they were a decade ago.
As such, fewer people feel the need to prioritise living close to the city if they’re not making the trip five times a week, which was the case for Slumbers.
He said: “At the end of the day, I only need to be in the office twice a week.
“When you look outside you can find houses with a bit more space, with a garden; essentially just a bit more rural.
“It’s worth living somewhere a bit more spacious if I’m not heading in as much.”
Other first-time mortgage buyers feel left at sea and inadequately supported throughout the process.
Claire Graham, a graphic designer with her own company, finally completed a purchase in Westbourne Grove with her fiancé last year.
Her new home is in Kensington and Chelsea, which ranked 366th out of 368 in terms of a percentage drop in the rate of first-time buyers from 2013 to 2023, at 39.56%.
She said: “We had lots of offers on other properties fall through, been gazumped, had surveys throw up things we weren’t expecting.”
Sergiu-Nicolae Tudoran, a 28-year-old software engineer at StoneX, said: “There’s a tonne of confusion when dealing with mortgage agents.”
Tudoran originally purchased his house as a shared-buy three years ago, but the first expert he spoke to took on a condescending attitude when learning he couldn’t take on the mortgage alone.
He said: “I was told that lenders don’t like to give out money to people who are on the breadline.
“That’s a direct quote.”
He’s now taking full-ownership of the property in Croydon – one of the 20 boroughs that hit its ten-year low in 2023, with a 9.1% drop in first-time buyers across the decade – but the ride hasn’t been steady.
He said: “Brick by Brick, who are the technical building owners and the shared owner, are being liquidated.
“Pair that with a slew of incapable and uncaring property management firms and it’s been a nightmare.
“There was a contract in our clause, which said rents can be renewed annually and it can only go up and it says it can go up to 10%.
“When we started off it was £750-770 that we were paying on top of the mortgage, and in three years that’s gone to £1,050.”
Tudoran has also had to contend with limited resources in the takeover process.
He said: “The hard bit is there is apparently no guidance at HMRC about how to do this once you bought the first shares, in terms of stamp-duty land tax.
“You either risk overpaying HMRC and hope that they will actually correct themselves or get a tax advisor, which will cost you more.”
The worst-affected local authority in the UK outside of the City of London was Tower Hamlets, which saw a 40.5% drop across the decade.
Jahed Mirza is the founder and director of Expert Mortgage Brokers in Limehouse, and the majority of his business comes from the Tower Hamlets area.
He believes that government rates and incentives dictate the market for first-time mortgage buyers, and that the data isn’t necessarily cause for concern.
He said: “Property prices do affect first-time buyers, but it’s more about duty-incentives.
“If the government’s giving more incentives like no stamp duty then you’ll see buyers come back into the market.
“Since Covid there was a massive rate-drop and influx of buyers, because the rate went up quite high.
“But they dropped stamp duty so there was an influx of buyers again.”
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