More bad news for renters in the capital as figures show the average Londoner spends nearly £70,000 on rent before being able to buy their first property.
Renters might be thinking it’s bad enough being almost unable to buy in the capital because of rising house prices, stamp duty and the strain of trying to save for a deposit while paying colossal rents, compared to the rest of the country.
But it gets worse: figures from Santander show the average London renter spends £68,200 on rent before being able to buy. This is almost two thirds more than the national average.
And for 35% of those, the rental period will hit 11 years.
Some Londoners will never buy, spending more than £410,000 on rent during their lifetime. This compares to the rest of the UK at £296,000.
The research also found the average amount needed up front for a security deposit in London is £816, with landlords on an average keeping more than a quarter of this, £211, when the tenancy ends.
More than half of tenants don’t get their full deposit back and, with the average tenancy lasting just three years, those who end up buying a home lose around £630 in deposit deductions.
Santander’s head of mortgages Miguel Sard said renting wasn’t usually the cheapest option, which perhaps doesn’t come as news to those who rent in London.
“Renting may appear to be the most financially viable option for some people, but in the majority of cases it isn’t the most cost-effective,” he said.
“Over the years, payments made by rental tenants amount to a staggering sum, and these are not funds that you can recoup.”
This comes as the average price for homes sold in December reached £250,000 – the threshold where stamp duty goes from 1% to 3%.
A person buying a £249,000 home will pay £2,490 in stamp duty, but on a £251,000 home the tax is £7,520.