You are here: Home - News -

Mounting house prices leave first-time buyers £77,000 worse off

by:
  • 05/03/2015
  • 0
Mounting house prices leave first-time buyers £77,000 worse off
First-time buyers are being forced to pay £77,000 more for a home as average house prices outstrip average wages by almost 10 times, research from Shelter reveals.

According to the charity’s analysis, if the average income of a first-time buyer and house prices had remained in line, individuals would be paying almost 40% less for their first home.

Those looking to purchase their first property in London will be required to shell out nearly £140,000 more for their homes in the current market, with homeowners having to pay up to £47,000 extra in Yorkshire and the Humber.

The findings come as the government released official figures celebrating the success of its Help-to-Buy scheme, which it says has helped 88,000 people buy a new home so far, with 80% of these purchases being made by first-time buyers.

Stephen Smith, mortgage club and housing director at Legal & General, said the findings shone a light on the UK’s “chronic housing shortage”.

“For several years now house prices have been increasing at way over the rate of inflation which has made the prospect of home ownership disappear into the distance for many younger people.

“The UK needs around 220,000 new houses to be built each year to tackle this issue. Attempts have been made with schemes like Help to Buy and recent pre-election pledges by all the main political parties but we need action sooner rather than later or we could end up with a totally unbalanced and unhealthy housing market in the future,” he said.

Shelter said such spiralling costs were having a dramatic impact on young people’s ability to purchase a home with their own money. Its findings showed that two-thirds of people aged 25-34 owned a home in 1991, in contrast to just over a third of people in the same age group today.

Shelter’s chief executive Campbell Robb said: “When wages and house prices are so out of sync that first time buyers are having to pay tens of thousands of pounds more for a foot on the ladder, it‘s a clear sign that our housing market is out of control.

“Politicians of all parties need to stop announcing piecemeal schemes and commit to ending the housing shortage once and for all. We need a big bold plan that will fix our broken house-building market for the long term, and finally put a stable home back within reach for generation rent.”

There are 0 Comment(s)

You may also be interested in

Read previous post:
Property fraud service hits 19,000 sign-ups

An alert service set up by the Land Registry to prevent property fraud has been used by more than 19,000...

Close