London home price surge hits first-time buyers

London

EVEN the Bank of Mom and Dad can't keep pace with London's spiralling property market.

The average cost of a home in the city has climbed to over £500,000 (S$1 million), forcing first-time buyers to make the largest downpayments as a proportion of their income in at least a decade, according to an analysis of Council of Mortgage Lenders (CML) data by Neal Hudson, an associate director at Savills plc. It's also prompting them to take out larger mortgages, the CML said.

At almost four times income, lending multiples for first-time buyers of average London homes are close to the limit for many banks after regulators last mo…