Mortgages  

Capital’s first-time buyers spend £70k on rent

Capital’s first-time buyers spend £70k on rent

The average first-time buyer in London will have spent nearly £70,000 on rent before they can afford to buy a home, according to new research.

The Association of Residential Letting Agents (Arla) Cost of Renting report calculated the average amount spent on rent for those buying for the first time in England this year is more than £50,000.

The cheapest region was the north east, where buyers spent an average £31,300 on rent before buying a property.

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The report, compiled with the Centre for Economics and Business Research, found those leaving home and starting to rent this year will spend an average of £64,400 before they are able to buy their first property – one fifth more than current first-time buyers getting on the housing ladder this year will spend.

Those leaving home and starting to live independently in London will continue to be worse off, as they will spend an average of £91,500 on rent before they can buy their first home, £23,100 more than those buying in the capital this year.

David Cox, managing director at the Association of Residential Letting Agents, said: “As rent costs continue to rise, unfortunately more and more tenants will find themselves renting for longer as they have less ability to save. We need to take action now, before we become a nation of forever renters.”

Alex Reynolds, IFA at Advies Private Clients, said: “This is about the difficulties first-time buyers are having to get on the property ladder, which is the deposit.

“Saving a few hundred a month takes a long time for a property valued at £290,000.

“If everyone wants to own a Porsche or Ferrari, guess what? They can’t. It is like anything: if you can’t afford it, you can’t afford it. It’s clearly a frustration.

“It is down to the government to encourage schemes for the police, teachers and public servants with 100 per cent mortgages.”