The average first home in London has almost doubled in price in 10 years to hit £464,000 today.
First-home prices in the capital are the highest in the country and have risen most steeply in the past decade, according to new figures from mortgage lender Halifax.
The cost of a first property has risen 69 per cent throughout the UK, from £142,500 in 2010 to £241,000 now.
Wages stagnated during the same period, increasing by just 1.8 per cent in February this year compared to their previous peak in March 2008 before the financial crash hit.
New stamp duty payable in every London borough, July 2020
Aside from London, the regions with the biggest decade price increase were the South-East, where prices were up 73 per cent to £303,800, and the East Midlands, where prices were up 68 per cent to £187,500.
The average first-time buyer in the capital also paid an eye-watering £109,000 deposit, more than double the national average.
Despite average deposits reaching record-breaking sums, they account for a lower percentage of the property value than they did 10 years ago.
Throughout the UK the average deposit of £47,000 accounted for 20 per cent of the purchase price, compared with 27 per cent in 2010.
Government schemes such as Help to Buy bolstered first-time buyer numbers, making it the biggest sector of the property market at the start of this year, with 52 per cent of buyers taking their first step on the property ladder compared with 38 per cent in 2009.
That said, Halifax found that coronavirus lockdown pushed the number of first-time buyers down by almost a third, with 117,000 in the first six months of this year compared to 164,800 over the same period last year.
Tom Martin, mortgages director at Halifax, said: “Whilst the number of first-time buyers suffered a sharp fall during lockdown, numbers are beginning to increase as we approach the autumn, with purchases that were paused beginning to move again, and buyers making the most of the Government’s stamp duty changes.
“With first-time buyers in London paying almost double what they were a decade ago, yet many regions in Scotland remaining affordable, the challenges facing first-time buyers are clearly significantly influenced by where in the UK they are house hunting.”
The most and least affordable places to be a first-time buyer
Areas are considered “affordable” when property prices are four times average local earnings or less.
Unsurprisingly, nine of the least affordable areas in the UK were in London, with homes in Brent costing £496,000, 12.3 times local earnings.
At 12.2 times average local earnings, homes in Hackney were second least affordable at £564,000.
With an average house prices of £424,700 costing 11.6 times salaries, Oxford was the only place outside London in the 10 least affordable places to buy a first home.
The most affordable area in the country was North Ayrshire in Scotland, where the average home costs £104,845, just 3.2 times average earnings.
Five of the 10 most affordable places to be a first-time buyer were in Scotland, with the rest all in the North of England.