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First time buyers spending nine times annual salary on home in London

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First time buyers now at 2007 levels according to Halifax

According to Nationwide building society Londoners are now having to pay nine times their annual salary in order to buy a home in the capital. This is a big increase and is due to the record price increase over the last fe years. During the 1990's Londoners were only having to spend three times their annual incomes to buy a home in the capital. The news comes as data released yesterday by the Halifax showed that the number of first time buyers that bought a home during 2014 was just over 325,000 which is the highest number since 2007. This also comes despite the fact that last year saw record house price increases and the lack of available homes to buy.

The main reason for the increase in numbers is down to a few factors but the main reason would appear to be the Help To Buy Scheme that was introduced as a way to help borrowers with a small deposit to buy a home. The mortgage market has also been very competitive and have been tempting borrowers in with fixed rate mortgages. Jobs security was also partly responsible for the increase in the number of sales as buyers took advantage of the improved jobs market and the subsequent health in the economy and the confidence that that brings with it.

On top of all of that buyers will also have been keen to get on the housing ladder before the government withdraws the Help To Buy Scheme which is of course possible if they feel it necessary to cool the market if it looks like it is overheating. Buyers don't want to miss the opportunity to buy a home and in many respects have purchased a property whilst they can still afford to. They have also been assured by the Bank of England that interest rates will not go up soon and so believe that they can plan ahead without any unexpected increased monthly payments.

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