House deposits rise faster than buyers can save

Top priority: Labour mayoral hopeful Dame Tessa Jowell says “every Londoner should have a place to call home”
Anthony Harvey/Getty

House prices are rising so quickly in London that deposits are outstripping the ability of first-time buyers to save, research revealed today.

An analysis by mayoral hopeful Dame Tessa Jowell found it would take up to 40 years for the average saver to raise a deposit in the capital’s most expensive areas.

But in 29 out of the 32 boroughs, rises were now so rapid that typical savers might never reach the point they could put down the deposit for a mortgage.

In Hackney, the cost of a 10 per cent deposit on a median property had risen £6,000 in a year, while a saver putting aside seven per cent of their earnings could raise only £2,200 during the same year.

It means that the years needed to save for a deposit in the borough have risen from 17 to 19 in only 12 months.

In Wandsworth the years needed for a deposit went up from 19 to 21, while in London’s priciest borough — Kensington & Chelsea — it would take a staggering 41.7 years, nine more years than 12 months ago.

Prices rose by less than the amount local people could realistically save in only three boroughs — Newham, Croydon and Havering.

Dame Tessa said: “London’s housing crisis has spun so far out of control it is becoming literally impossible to save for a deposit. We cannot go on like this.”

The former Olympics minister is proposing to expand schemes to help first-time buyers who cannot muster deposits, such as “rent to buy” and Genie Home agreements, which offer 30-year contracts without a deposit.

She said: “Every Londoner should have a place to call home — that will be my goal as mayor.”

All of the six Labour rivals standing to be candidate for Mayor of London have named housing as their top priority.

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