London has 40% fewer first-time buyers since 2002

The number of first-time buyers getting on the London housing ladder has fallen by more than 40 per cent in the past five years, figures show.

The decline has been caused by property prices in the capital rising by 54 per cent since 2002, while average wages have lagged well behind.

In 30 of the 32 London boroughs average homes are now out of the reach of first-time buyers, compared with 12 five years ago.

In 2002, there were about 70,000 people attempting to buy first homes in the capital; today there are 40,000 - a reduction of 41 per cent.

Halifax chief economist Martin Ellis said: "Only two boroughs, Newham and Barking and Dagenham, are now within the reach of the average first-time buyer in London."

Experts say this year has been one of the worst for aspiring buyers. The average price paid by this group in London rose by 15 per cent this year to £288,615 - up from £187,693 in 2002.

The vast majority bought a flat, fewer than one in four were able to afford terrace houses, and only eight per cent bought a semi. The average deposit paid by first-time buyers in London this year was £61,964, up 49 per cent since 2002. The average first-time buyer in the capital paid £8,658 in stamp duty (at the three per cent rate) compared with the UK average of £1,750 (at one per cent).

Mr Ellis warned there was no "quick fix" to the first-time buyer problem, but said a more subdued housing market over the next few years was a positive step for potential new entrants. "House price growth below average earnings growth, together with more government initiatives, may in time begin to address the issue," he added.

However, a study by mortgage lender GMACRFC found that as well as the difficulties of saving for a deposit, stamp duty and legal fees, many people said "other factors" were deterring them from buying a property.

Cultural attitudes - not wanting to get married or settle down, or wanting to put off having children, for example - were just as important as financial issues.

Property expert David Lawrenson of www. lettingfocus.com said many people were choosing to rent because it suits how they live, or they simply do not want the commitment of a mortgage.

"It is not just young people and couples who rent," he said. "It seems that a new sector of tenants is coming through - working families who like the flexibility that renting offers."