New City Hall analysis shows first-time buyers in London face paying over £200 more each month in mortgage costs

• New City Hall analysis shows that first-time buyers and those re-mortgaging in London face forking out £209 more each month on their mortgage following autumn 2022 mini-budget  
• More than four in ten (42 per cent) Londoners on low-middle household incomes say they will struggle to meet their mortgage payments in the next six months, up from 34 per cent last year 
• Mayor warns that high mortgage rates and cost-of-living pressures are making homeownership impossible for more and more Londoners 
• Mayor renews calls on Government to urgently protect London’s homeowners from financial devastation by introducing mortgage payment holidays  

The Mayor of London, Sadiq Khan, is today renewing his call on the Government to take urgent steps to protect London’s homeowners from financial ruin, as fresh City Hall analysis shows an alarming number of households in the capital could struggle to cope with higher mortgage bills.  

New City Hall analysis reveals that typical mortgage costs for first-time buyers and those re-mortgaging in the capital has substantially risen ever since the Government introduced its mini-budget in September 2022.  

A London first-time buyer taking out an average mortgage on typical terms at rates quoted in January 2024 would pay around £209 a month more than they would if taking out the same mortgage in August 2022, just before the mini-budget was set, equivalent to over £2,500 a year. [1] 

This comes as latest YouGov polling for City Hall shows that more than four in ten (42 per cent) Londoners on low-middle household incomes (households with a gross income of less than £60,000 per year) say they will struggle to meet their mortgage payments in the next six months [2], up from 34 per cent last August. [3]

Sadiq has been clear about the devastating impact of high mortgage rates on lower-income Londoners’ ability to make ends meet, warning Ministers that unless urgent action is taken thousands of Londoners could see their homes repossessed, forcing many into housing insecurity and homelessness.   

Sadiq has also long-warned that more and more Londoners – especially young and lower-income Londoners – are struggling to get their foot on the property ladder, seeing no viable way to achieve their dreams of homeownership when mortgage rates and cost-of-living pressures continue to spiral out of control.  

The Mayor is once again pressing Ministers to reinstate mortgage payment holidays to give London homeowners breathing space. He is also calling on the Government to reverse cuts to support for mortgage interest through the social security system and allow owners in significant difficulty to switch their housing tenure to affordable rented or shared equity to allow them to remain in their homes.    

The Mayor of London, Sadiq Khan, said: “The Government’s catastrophic mini-budget has destabilised our economy, sky-rocketed interest rates, and added hundreds of pounds onto mortgage bills each month, leaving thousands of first-time buyers and London homeowners on the brink of financial devastation. 

“The Government have so far failed to recognise the scale of the crisis and take accountability for their reckless actions which have far-reaching consequences. I will not be silent as more and more Londoners struggle to make ends meet and are forced to give up on their dreams of homeownership. 

“I’m calling on Ministers to urgently reinstate mortgage payment holidays to prevent a wave of repossessions across the capital and give London the proper funding it needs to accelerate the building of more genuinely-affordable homes, helping to build a better, fairer London for all.” 

Angela Kerr, Director of the HomeOwners Alliance, said: “We strongly support the Mayor's calls for the Government to support struggling homeowners. 

“It can't be right that homeowners are bearing the brunt of this fiscal experiment to battle inflation and in the process are having to find over £200 a month or risk losing the roof over their heads. We have been calling on the Bank of England to end the extended period of high interest rates bringing misery on thousands of households.

“City Hall's latest analysis echoes our own recent study which found that 1.9 million aspiring homeowners across the UK do not think they will follow in the footsteps of their home-owning parents. The Government must do more to ensure a whole generation doesn't give up on the dream of homeownership. In the meantime, struggling homeowners should research their options via our website and seek advice sooner rather than later.”

ENDS