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Experts have revealed how much the average first-time buyer needs for a household income to get onto the property ladder.
Zoopla estimated that the typical first-time buyer needs earnings of £60,600 – which it said is £14,900 more than five years ago and £2,400 more than a year ago.
The analysis was based on average asking prices of first-time buyer homes for sale on Zoopla of around the £250,000 mark, based on the homes that people wanting to get on the property ladder are looking to buy.
The website assumed buyers would have a 20% deposit and be borrowing 3.3 times their income as a mortgage.
Izabella Lubowiecka, senior property researcher at Zoopla said: “The challenges facing first-time buyers are not the same across the UK.
“Access to home ownership requires lower incomes in much of Wales, northern England and Scotland. The greatest challenges are in southern England, especially London where first-time buyers are already buying cheaper homes than the average in an effort to try and improve affordability.”
Zoopla found that in London, first-time buyers would typically need a household income of £103,000.
In Wales, they would need £38,800 and in Scotland an income of £31,500 would be needed, according to the calculations.
The findings were released after Office for National Statistics (ONS) figures released this week showed that Consumer Prices Index (CPI) inflation slowed to 2% in May, down from 2.3% in April.
Meanwhile, a “property tracker” survey from the Building Societies Association (BSA) released on Thursday found that more than half (56%) of people think the deposit required to buy a home is too high, rising to nearly two-thirds (63%) of first-time buyers.
Nearly seven in 10 (68%) people felt that the affordability of monthly mortgage repayments is a growing barrier to buying a home.
A similar number (65%) said raising a deposit is an obstacle.
The Bank of England is due to make its latest interest rate decision on Thursday. But experts have said that, while an important marker, slowing inflation was not set to mean an imminent reduction to interest rates from the current level of 5.25%.
Paul Broadhead, head of mortgage and housing policy at the BSA said: “Borrowers will be disappointed that the bank rate is expected to remain unchanged today, as a cut would have provided a little much-needed optimism to homeowners and first-time buyers.”
More than 2,000 people were surveyed by YouGov across Britain in June for the BSA survey.
Source: independent.co.uk
