First-time Buyers Priced out of London Property Market – RBS Group
RBS Group, one of the leading mortgage lenders in the UK, recently warned that first-time buyers are being priced out of the property market in London.
According to company's economists, the house price-to-earnings ratio is rising steadily. In 2011, first-time buyers in London spent 67% of their income on mortgage payments. Today, this figure has risen to 79%.
Commenting on the findings, RBS Group economist, Fionnuala Early, said: "The average Londoner trying to save for their first home has to spend around three-quarters of their income on rent, leaving precious little for savings. This compares to around half [of their income] for the rest of the UK." On average, first-time buyers in London have to save for 51 months for a 10% mortgage deposit. The availability of 90% LTV mortgages, however, is very low, not taking the NewBuy scheme in regard.
Some banks have already warned they will scale back high LTV lending in the coming months.
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