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10 September 2007

First-time buyer costs soar down south

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by Kay Mitchell

First-time buyer costs soar down south

According to Abbey Mortgages, the north-south divide has never been greater for first-time buyers. People in the south only had to borrow £32,927 in 1997 to get onto the property ladder – only 8% more than those in the north who borrowed £30,522.

However, a decade later and first-time buyers in the south are now borrowing an average £128,370 – a whopping 31% more than their northern counterparts at £89,189.

There has always been a gap between the capital and the north of the country. A decade ago, the average first time buyer borrowed £44,379, approximately 30% more for a property in London than in the cities of Manchester or Liverpool, where the average price was roughly £30,689.

However, the gap is far more significant today with the average Londoner borrowing £186,025 – nearly double that of a northerner who borrows £97,584 to purchase their first property.

In the south, the costs of getting a foot onto the property ladder have raced ahead of the north but it’s done little to stop a southerner from buying a house. Actually, the number of first-time buyers has more than doubled in the south over the past 5 years. Despite it becoming relatively cheaper in the north – the number of first-time buyers has declined.

A spokesperson for Abbey Mortgages commented that despite the property price difference between the north and the south, it has done little to upset the demand for first homes in the south. Abbey suggested that those in the south want to purchase now as they are anticipating a rapid increase in prices. However, those in the north probably feel that they have less to gain in getting onto the property ladder.

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