The average London homebuyer has been required to pay an additional £35,500 for their deposit due to surging mortgage rates, according to homes portal Zoopla. These rising costs are attributed to the Iran war and the resulting increase in borrowing expenses.
Across the UK, the average deposit is £18,400 higher than in January. However, the impact on Londoners is more pronounced, with their additional deposit costs being more than three times the extra £10,200 needed by buyers in the North East.
The country's mortgage market has seen significant changes since the Iran war began, with average rates initially rising as high as 5.54 per cent. While this initial surge has moderated, the average five-year mortgage rate has still increased from below four per cent in January to around 4.8 per cent today.
Zoopla indicates that first-time buyers are particularly affected by these larger mortgages, as they often take longer mortgage terms and larger loans compared to existing homeowners. Struggling housebuilders have urged the government to intervene to support first-time buyers, with companies like Bellway and Barratt Redrow, alongside Rightmove, calling for stamp duty reductions.
Property experts at Zoopla suggest that an autumn boost for the UK housing market may be on the horizon. The number of people searching for homes on their platform is seven per cent higher than last year, despite sales agreed remaining six per cent lower.