London gets even worse for first-time buyers as UK cities ranked
London has become an even worse city for first-time buyers, according to new figures, but the situation has now stopped people flocking to the capital for the social and career opportunities.
The capital has moved down one place to 44th out of 50 in the latest ranking from mortgage provider Aldermore.
The study compared cities based on house prices for first-time buyers, restaurants and pubs and pay.
London offers the highest average salary (£43,623) of all UK cities, as well as good access to social amenities and a high number of graduates.
However, the capital’s high house prices, oft-unattainable deposit requirements and limited potential for house-price growth have weighed on its ranking, according to Aldermore.
High growth in property prices over the last two decades have caused the market to pull away from the rest of the rest of the UK, creating a gap which is slowly closing over time as other areas of the country catch up. It also, unsurprisingly, has the worst commuting time in the UK.
Northern hubs and Scotland scored particularly well – Scottish cities Glasgow, Dundee and Aberdeen took the top three spots, unchanged from last year.
London also ranked behind Manchester, Newcastle and Leeds – all of which ranked in the top 10 – as well as Birmingham, Cardiff and Hull.
Southend, Maidstone and Basildon took the bottom three spots.
Demand shows no sign of dropping
Despite a less-than-ideal financial attraction, demand from first-time buyers remains high as many young people still dream of owning a home in the city.
First-time buyers made up 48 per cent of house hunters in London at the beginning of 2024 as cheaper mortgages relieved pressure on the market, according to Countrywide estate agents.
The figures came as the amount of mortgage debt Brits took on in July reached its highest level since November 2022.
“It’s an exciting time for potential buyers, affordability is improving, and the window of opportunity is wide open… Lenders are fiercely competing to offer the most attractive deals and there is now a real momentum building,” Ranald Mitchell, Director at Charwin Mortgages said.
London still has ‘hidden gems’
London’s size means that while the city overall might not be the best place to buy in the UK, some areas offer better-than-average opportunities for young people.
Within London, the best place to buy was Hounslow, followed by Lewisham, Barking and Dagenham, Southwark, and Tower Hamlets.
Barking and Dagenham performed the best out of all London boroughs on property opportunities, with an affordable average selling price for first time buyers of £328,068, healthy house price growth of 3.3 per cent and lower deposit requirements, of £88,128.
High-growth areas in east London like Hackney Marshes and Hornchurch also offer strong potential for buyers.
Jon Cooper, director of mortgages at Aldermore, said: “Although London ranks low in our First Time Buyer Appeal Index this year it remains a dream for many young people to buy in the capital. With its job opportunities and higher than average income alongside the culture and nightlife, London is still very appealing.
“However, first time buyers should consider their options and investigate which boroughs are attainable. Some will be more affordable, while others offer better lifestyle prospects but are more expensive.”