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Homebuyers in London must find £80,000 deposit

London residents have to find around £81,650 as a deposit to afford an average-priced home compared with only £15,000 in 1997, according to personal finance website Moneynet.

This finding, basing affordability on someone borrowing three and a half times their salary, comes from a survey by Moneynet to track changes in finance since the website&#39s launch five years ago.

It reveals that while house prices have increased by a national average of 64 per cent over the last five years to £102,007 from £65,696, the aver-age national weekly gross wage has gone up by just 26.4 per cent to £464.70 from £367.60.

The situation is most severe in London where the average house price has risen by 90.8 per cent to £195,391 from £102,409 in 1997 whereas in Scotland it has gone up by 12.5 per cent to £66,480 from £59,070.

During that time, the average weekly wage in London has gone up by 30 per cent to £624.10 from £480.10. Despite the gap between salaries and house prices, Moneynet says the average monthly repayment eats into less of a homeowner&#39s income now than in 1997.

So far this year, the average rate of interest on a mortgage has been 4.56 per cent while five years ago it was 6.82 per cent.

Partly because of lower rates, a homeowner spends an average of 17.5 per cent of income on mortgage payments compared with 20 per cent in 1997.

Moneynet managing director Richard Brown says: “Moneynet&#39s growth in just five years led us to look at other changes that have happened in the personal finance since our launch.”

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