Average Londoner hoping to get on the property ladder will spend more than a century saving for a deposit

Londoners on an average annual salary of £34,320, hoping to get onto the property ladder, will have to save for 121 years before they have enough for the deposit needed for an average priced flat in the capital, according to a new study by residential crowdfunding platform Property Partner.

 It now costs more than £457,000 for the average London flat. The deposit needed to buy the property, assuming the first-time-buyer secured a mortgage of four times the average London salary, would be a whopping £320,505.

If they were saving 10 per cent of their net annual salary towards a deposit, it would take more than a century to have saved enough, without any financial help from the ‘bank of mum and dad’.  Putting aside 20 per cent of net income a year would take 60 years and saving half their salary would still mean a 24-year wait.

Researchers at Property Partner analysed the average price of a flat in each of London’s 33 boroughs (including the City of London) and how long it would take a person to save up for a deposit assuming they secured a mortgage of four times the average London salary (£34,320).

The study looked at the homebuyer saving 10 per cent, 20 per cent and half of their net annual salary towards a deposit and the length of time they would have to wait before being able to afford a flat in different parts of the capital.

In the most expensive borough – Kensington and Chelsea – you would have to be Doctor Who to stand a chance of getting on the property ladder. It’s unlikely any first-time-buyer would choose to buy in Kensington and Chelsea, but if they did, it would take 389 years to save the £1m deposit needed. Even if you were able to save half your salary after tax, it would still be 78 years before you had enough cash to put down as a deposit for an averaged priced flat of £1.16 million.

The following table shows the London boroughs where it would take the most number of years to save the deposit for an average price flat:

Boroughs

Average price of flat

Deposit needed

Years saving 10% of net salary

Years saving 20% of net salary

Years saving 50% of net salary

Kensington and Chelsea

£1,168,220

£1,030,940

389

194

78

Westminster

£909,799

£772,519

291

146

58

City of London

£860,850

£723,570

273

136

55

Wandsworth

£860,850

£723,570

273

136

55

Camden

£719,779

£582,499

220

110

44

Hammersmith and Fulham

£692,201

£554,921

209

105

42

Islington

£602,556

£465,276

176

88

35

Hackney

£522,130

£384,850

145

73

29

Richmond upon Thames

£480,576

£343,296

130

65

26

Lambeth

£471,546

£334,266

126

63

25

Source: Property Partner/Land Registry House Price Index

Even in the cheapest borough in the capital – Barking and Dagenham –  a buyer earning the average London salary would still need to wait 31 years to afford the £82,283 deposit on an average priced flat (£219,563). If they were living rent free and lucky enough to be able to save half their net annual income, it would take them a more realistic six years.

The following table shows the London boroughs where it would take the least number of years to save the deposit for an average price flat:

Boroughs

Average price of flat

Deposit needed

Years saving 10% of net salary

Years saving 20% of net salary

Years saving 50% of net salary

Hounslow

£327,675

£190,395

72

36

14

Bromley

£297,773

£160,493

61

30

12

Redbridge

£294,735

£157,455

59

30

12

Enfield

£289,747

£152,467

58

29

11

Hillingdon

£278,513

£141,233

53

27

11

Sutton

£274,245

£136,965

52

26

10

Croydon

£273,876

£136,596

52

26

10

Bexley

£231,591

£94,311

36

18

7

Havering

£225,990

£88,710

33

17

7

Barking and Dagenham

£219,563

£82,283

31

16

6

Source: Property Partner/Land Registry House Price Index

Dan Gandesha, CEO and founder of Property Partner, said: 

“It’s staggering that if you have no help from family or friends, and you hope to buy on your own, it’s now almost impossible to afford anywhere in London. Even in the ten most affordable boroughs you’d need to be saving an ambitious 20% of your net annual salary to stand a chance of getting the deposit together before you reached middle age.

“With record low interest rates and inflation rising, savers are seeing their money slowly erode. And if you’re also worried that property prices are  running away from you, there are of course alternative ways of investing and tracking the market.

“The housing market is broken and we need a major shift in thinking. The British obsession with owning their own home is now for many, at least in London, a pipe dream. More needs to be done to incentivise the private rental sector. In Germany, long-term renting is generally accepted and the cohort of long-term renters in the UK is growing, by force of circumstance.

“Build-to-rent is one of many ideas to help solve the UK’s housing crisis, and the quicker we can provide good quality, professionally managed homes, for both the public and private lettings sector, the better.”