Mortgage advice for first time buyers: London prices cross £500,000 for first time

20-May-2013

Published by Helen Adams.

Industrial analysts are suggesting that mortgage advice for first time buyers may be needed after asking prices for homes in London rose by 3.3 per cent in May to £509,870. Not only is this over double the national average, but it is the first time the asking price average has crossed the £500,000 mark in the capital city, marking a new record.

As the tough economic climate continues, this does not seem to be diminishing the rising house prices. According to a new report by property website Rightmove, the national average price has risen by 2.1 per cent to £249,841. May marks the fifth month in a row that has seen home prices rise, meaning that the first five months of 2013 has seen a 9.1 per cent increase in the cost of the average UK home.

London in particular has seen a very high demand from first time buyers in what is nearly the first half of the year, even though supply is extremely short. This in turn has caused prices to soar. Looking at separate boroughs, prices in Camden have risen the most at 7.2 per cent, whilst Brent, Lambeth and Southwark followed at 5.9 per cent, 5.6 per cent and 5.3 per cent respectively. Surprisingly, prices only rose by 0.6 per cent in the most expensive borough of Kensington and Chelsea, where the average home will set you back around £2.37 million.

Miles Shipside, director at Rightmove, said: "The pressure cooker of the London property market has been building up a head of steam every month since the beginning of the year. For those with money, many options to borrow remain open in spite of the credit crunch, and this is helping fuel the London price boom."

With separate research coming from the Royal Institution of Chartered Surveyors stating that April had also seen price hikes, it may seem that the housing market is on it's way to a slow recovery in 2013. 

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