The average 22-29-year-old living in London will need to save for nearly 14 years before they can put down a 10% deposit to buy their first home.
Data from GOV.UK and Commons Library indicates that the average 22-29-year-old putting aside 10% of their monthly income will need to do so for 166 months – or 13.8 years – in order to make a 10% deposit payment on the average London flat.
London’s house prices have risen by around a third in the last decade, and the capital has long since been the most expensive city to live in the country.
Now, the homes that were deemed more affordable ten years ago are now out of reach for many hopeful buyers.
Zoë Garbett, Green Party councillor and London Assembly member said: “It’s a real crisis in London. For people that want to create their lives here and be part of communities here, it’s really difficult.”
Those on lower wages – many of whom are in the public sector – are in danger of being trapped in a cycle of unaffordability due to rising rent prices and are facing the prospect of renting for their entire life.
Garbett said: “One of my main concerns is around how expensive rent is. Nursers and different key workers can’t afford to live where we need them to be able to live and work.
“If people are spending 40% of their wages on rent – which is the average in London – then how are they able to save any save any money to secure a home?”
Many young professionals who work in the city are opting to live in so-called ‘commuter towns’ – areas that are outside of London but reasonably well connected to it via rail.
Here, rent prices will often be favourable to those in the capital and young buyers have a chance to save a portion of the earnings as a result.
Hannah Gornall is Community Editor at a major sporting body, and has now bought a one-and-a-half bed flat in Wandsworth.
However, she and her husband opted to live in Bishop’s Stortford for five years in order to make the purchase feasible.
She said: “After I finished university, my partner and I moved to a commuter town for about five years, so obviously rent was considerably cheaper than it is in London.
“We tried to save a portion of income every month – around £400, not easy! But much easier when your rent isn’t £1,500 or something.
“We rented in London for another three years, but it got a lot harder to save. I would have been keen to live somewhere else, to be honest, but my husband’s job requires very early starts and late finishes, so it wouldn’t have been feasible to stay in a commuter town.”
Despite the best efforts of Hannah and her husband, simply saving was not enough.
They ultimately relied on financial support from Hannah’s parents to make up a reasonable deposit payment on their first home.
Hannah said: “When we decided to buy somewhere, we had help from my parents. They contributed over half our deposit, which is the only reason we could afford to get the mortgage.”
Those without parental or family support are left with very few options should they wish to buy in London.
Hannah said: “People with dual incomes can do it, but it’s so hard to do by yourself unless you’re earning six figures or have a bit of a nest egg.
“I have some friends who work in London but don’t think they’ll be able to buy at all.”
The Labour Government last year pledged to build 1.5 million homes in its first five years of power in a bid to make affordable housing more widely available and bring down costs.
However, Garbett believes that simply building more homes only addresses part of the problem.
She said: “There’s often this narrative with the housing crisis that we just need to build more homes. That is part of the solution, but we do need to focus on doing these other things as well like bringing down rents and looking at how we repurpose homes.
“I’m a Dalston councillor, and there’s been a huge amount of development in Dalston – build, build, build – of mainly one and two bed properties, not the kind of family homes that the area needs.
“That’s really pushed up other property prices here and pushed up rent. It really undermines the idea that just building homes is the solution.”
Moving forward, Garbett feels the Government should prioritise repurposing Brownfield sites in London, before streamlining the planning process to allow new homes to be built.
She added: “There are around 286,000 planning applications that have planning approval but haven’t been built in London.
“Developers talk a lot about how it’s the planning process that slows things down, but actually we’ve got those planning applications that have been approved by councils or by the mayor but just haven’t been executed.
“So I think it’s looking at what some of those blockers are, and especially try to prioritise building on Brownfield land.”
The Mayor of London, Sadiq Khan, announced plans in November to build rent-controlled ‘Key Worker Living Rent’ (KWLR) homes to mitigate the effects of rising rent prices on key workers in the capital.
He suggested that the rent of such homes be controlled and directly linked to the income of key workers, which could allow for significant savings.
In a press release from the Mayor’s office, Khan said about the plans: “The housing crisis in our capital doesn’t just affect those on the lowest incomes, it impacts those on ordinary incomes who struggle to meet high housing costs in London.
“That includes the everyday heroes who are the backbone of our city – our nurses, teachers, bus drivers, shop workers, and cleaners.
“We want to introduce new rent-controlled homes for Londoners, which could save key workers up to £600 per month on their rent.”
The Mayor is aiming to start building 6,000 KWLR homes by 2030.
Featured image credit: Lars Plougmann via Flickr under CC BY-SA 2.0 licence
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