First-time buyers in London face a significantly tougher challenge to homeownership, with the average home in the capital now costing 14.7 times average earnings after accounting for stamp duty, national insurance, and income tax, according to an analysis by Moneyfacts.
This figure is more than double the burden experienced by first-time buyers in other English regions, including the North West, North East, and Yorkshire. The research suggests that government statistics, which only consider regional property prices as a multiple of gross earnings, underestimate the true scale of unaffordability.
Most London homes now exceed the £500,000 cap for first-time buyer stamp duty relief, leading to an average charge of £16,350 for those purchasing their first property. Freezes in tax bands, such as the personal allowance, have also disproportionately affected younger workers in London, impacting their ability to save and borrow.
Moneyfacts calculations indicate that buying a typical London home requires approximately £70,000 in upfront cash, which could take an average Londoner over 12 years to save, covering larger deposits and increased stamp duty.
Adam French, Head of Consumer Finance at Moneyfacts, noted that the UK tax burden is heading towards a historic high, meaning workers are keeping less of their pay rises before saving for a home. He added that the tax system, combined with high prices and limited housing supply, is becoming a significant barrier for aspiring London homeowners.
This analysis coincides with a slump in housebuilding in the capital. In 2025, construction began on just 5,547 new private-sector residential homes, an over 80 per cent decrease compared to a decade prior. City Hall estimates suggest London requires 88,000 new homes annually to meet demand.