“Britain’s housing market remains distorted 10 years on from the global financial crisis, with first-time buyers struggling to scrape together the much bigger deposits they need today, existing owners unable to “climb the ladder” and a gaping price divide between London and regional cities, according to a report out today.
The average house price has grown to £478,142 in London compared with the national average of £209,971. A decade on from the 2007 crash, prices have only just started gaining ground in Wales, Yorkshire and Humberside and the north-west, while values in the north-east are down 9%, according to analysis by the real estate company Savills.
Nationally the typical deposit has doubled to £26,224 while in the capital it has quadrupled to nearly £100,000. In the year to the end of March, about £4bn out of £10.2bn in first-time buyer deposit money came from either the “bank of mum and dad” or government help-to-buy schemes. Interest-only mortgages – which were key to going up the housing ladder – have become a thing of the past, and owners are staying put rather than selling.
The market has slowed overall with a “dramatic slump” in transactions. The HomeOwners Alliance says little more than a third of houses put on the market in London are selling. Those that do sell are taking longer, and owners are having to accept a bigger cut to their asking price. Overall the 2007 crash is “still shaping the UK housing market” and will for years to come, Savills predicts.”