London’s first-time buyers could save upto £5,000 a year – here’s how


As many first-time buyers’ fear, buying your first home in London – when working in the city – is unaffordable and seems like a pipe dream. That is true for many, when the average house price has skyrocketed to a whopping £490,000.

However, first-time buyers could get themselves on the property ladder much sooner if they spend their time doing some research. A recent study by new mortgage and insurance advice service Saffron Mortgage Finders, has identified some interesting findings for young professionals that could assist them in buying their first home, without too much disruption to their lifestyle and even offering some additional disposable income.

The study, conducted in May 2020 compared the average house prices in cities commutable from London to house prices in the capital, and looked at the cost of commuting to see if there was a saving to be had by living in these cities – and the findings were very interesting.

As an example, if a first-time buyer was to purchase their first home in Luton – a city commutable directly into London, the saving per year for a full term of a 25 year mortgage was an unbelievable £5096.79 – not bad for a commute time of just 38 minutes. How do first time buyers save so much? The average house price in Luton is just over £272,000 – saving nearly £207,000 on the average house price compared to London. With the additional travel cost of £3176 against a London Zone 1-5 travel card (£2,400), the savings on the monthly mortgage repayment, not including interest, is over £5000.

However, this is not the case in other commutable cities. If a first time buyer would like to choose the beautiful city of Cambridge as their first-home base, based on the same formula and taking into account average house prices, it would be cheaper for them to buy in London as it would cost an additional £204 per year on mortgage repayments and travel costs (not including interest).

Colin Field, Director of Saffron Mortgage Finders comments: “It is common to discuss the difficulty of buying your first home in London and it is always advisable to explore house prices – in all areas. Getting on the property ladder might not be as difficult as expected, it just requires some time to research, plan and budget and if done cleverly, it does not have to financially or physically disrupt your lifestyle. It is common to commute up to 45 mins just getting from one side of London to the other.”