Recent data from Hamptons showed that falling mortgage rates are attracting first-time buyers back to the capital – this group has purchased a record 48% of homes sold in London so far this year, up from 41% in 2023 and 28% a decade ago.
Recent data from Hamptons showed that falling mortgage rates are attracting first-time buyers back to the capital – this group has purchased a record 48% of homes sold in London so far this year, up from 41% in 2023 and 28% a decade ago.
The impact of lower rates on purchasing power and affordability has been significant. The average first-time buyer purchasing in London spent £443,550, £39,360 more than last year. The average London first-time buyer with a 15% deposit would now be spending £2,070 a month on their mortgage repayment, £273 less a month than if they had bought in the first half of 2023.
"Lower mortgage payments have pulled the cost of buying back below renting, offering relief to first-time buyers in the capital"
Head of Research at Hamptons Aneisha Beveridge said: “Falling mortgage rates are starting to turn the tide on the rising number of first-time buyers leaving London. Lower mortgage payments have pulled the cost of buying back below renting, bringing relief to those looking for their first home in the capital. First-time buyers with deeper pockets are looking again at London.”
November marked the fifth consecutive monthly UK house price rise and the biggest leap so far this year, according to Halifax. The mortgage lender said property values were up 1.3% compared with October.
We expect positive price growth this year – in a climate of falling mortgage rates, improving affordability and the release of some pent-up demand. Rightmove reported that first-time buyer demand in the capital in September 2024 was 28% ahead of 2023, moving up to 31% after the autumn budget.
International property company JLL has said it expects Greater London house prices to increase by 22% over the next 5-years, beating nationwide UK growth predictions of 20% over the same time span. The firm added that within those headline figures, it expected lower value markets to see stronger growth towards the beginning of the period, with more expensive markets like London and the South East outperforming in the second half.