Young buyers priced out

First-time home buyers under 25 have all but disappeared from the London market, the Halifax reveals today.

The percentage has plummeted from 26 per cent in 1988 to 5 per cent in 2001 as London house prices outstrip growth in earnings. Average house prices are now five time average London salaries, up from 4.5 times in the Eighties boom.

With lenders demanding bigger deposits, first-time buyers "face serious difficulties getting on to the housing ladder in London", Halifax said.

Elsewhere the average price paid by first-time buyers is only 3.1 times average earnings. The total number of first-time buyers in London was 75,500 last year and they made up 51 per cent of all mortgage borrowers.

The figure was 30 per cent lower than in 1988 but up from 55,000 during the slump of the early Nineties. The average price paid by first-time buyers in London last year was £161,500. The average age of all first-time buyers in London has risen from 33 in 1988 to 35 in 2001, above the UK average of 34.