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Using the £471,687 average price of a starter home in the capital, estate agent Benham and Reeves ran the numbers...

An estate agent has exposed the true cost of no-deposit mortgages. These products are increasingly touted as a convenient way on to the property ladder for people who can’t save for a deposit, or want to get on with buying without saving first. But the agency Benham and Reeves has revealed that some first-time buyers are set to pay more than £73,000 extra in interest during the first five years of homeownership alone, if they use one of these products.

Benham and Reeves analysed the cost of purchasing both the average first-time buyer home and the average home across the wider London market using a 100% mortgage product, comparing it to the cost of buying the same property with a 15% deposit mortgage based on current average market rates. The research shows that the average first-time buyer property in London currently costs £471,687.

The housing market under London’s Mayor Sadiq Khan, and former Greater Manchester Mayor Andy Burnham, now prime minister, tells two very different but significant stories, according to new research from Benham and Reeves.

And there are some on the other side of the debate who agree, including Benham and Reeves director and landlord Marc von Grundherr, who called it a ‘myth’. ‘Yes, legislative changes have reduced profit margins in recent years, but this simply hasn’t been the deterrent the Government hoped it would,’ he tells Metro. ‘While many landlords will always be “thinking of selling”, the majority aren’t because they’ve continued to benefit from upward rental growth and the capital appreciation of their initial investment.' Marc adds that despite current issues, ‘long-term, which is the view landlords must take, they have seen a very strong return.’

Marc von Grundherr, director of agency Benham and Reeves, said some tenants have only disclosed a pet after signing their tenancy agreement, while others have been discovered during property inspections.

Marc von Grundherr from the London-based estate agent Benham and Reeves said: “We have certainly seen a noticeable increase in interest from Turkish buyers, and the rise in Turkish shareholders from seventh to fifth place reflects the trend we are seeing on the ground.

For the right borrower, 100% mortgages can be a sensible option, particularly where monthly repayments are comfortably affordable, and there’s a clear intention to remain in the property for the medium to long term. That said, they do come with a greater degree of financial risk says Marc von Grundherr,director of Benham and Reeves.

Marc von Grundherr, director of Benham and Reeves, tells Metro: ‘For the right borrower, 100% mortgages can be a sensible option, particularly where monthly repayments are comfortably affordable, and there’s a clear intention to remain in the property for the medium to long term.

Benham and Reeves. Across the UK as a whole, a £300,000 home bought in April 2016 would now be worth around £388,000, a gain of about £88,000 ...