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First-time buyers need £54k income to buy in UK cities ‒ Zoopla

  • 27/06/2019
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First-time buyers need £54k income to buy in UK cities ‒ Zoopla
The average income needed by a first-time buyer in order to purchase a property in one of the UK’s main cities has risen by nine per cent over the last three years to reach £54,000, according to the latest study from Zoopla.


It added that the typical deposit required for a first-time buyer to purchase in one of these cities was now more than £38,000.

While the average income needed has grown overall, Zoopla pointed out that for buyers looking to pick up their first property in London, Oxford or Cambridge ‒ the UK’s three most expensive cities in which to buy a home ‒ the required income has dropped by an average of five per cent since 2016.

In London for example, buyers now need an average income of £84,000, down from the £87,250 needed three years ago. 

However, the biggest percentage fall in income required was Aberdeen, where the average income needed to buy a home dropped from £38,300 to £33,700, down 12 per cent. Zoopla put this down to the sharp house price decreases in the city since the crash in oil prices.

The study revealed a wide range of average incomes required in order to buy a typical property across the different cities. In Liverpool for example, the necessary salary stands at just £26,137, making it the most affordable market for first-time buyers. 

This is despite the fact that Zoopla’s analysis suggests it saw the highest house price growth of all 20 cities analysed for the report.


High income and price rises

The analysis is based on the need for a 15 per cent deposit in regional cities, jumping to 25 per cent in London, Oxford and Cambridge, as well as borrowers only being able to take a mortgage that is up to four times their income.

Zoopla noted that the income needed to buy has grown fastest in cities where prices have also been rising quickly. Leicester, Birmingham and Manchester for example have all seen the largest percentage increase in required incomes, and have also seen house price growth totalling at least 18 per cent over the last three years too.

Richard Donnell (pictured), research and insight director at Zoopla, noted that first-time buyers are “an important group”, accounting for a third of sales, and suggested that the fact the most expensive cities have seen a fall in the required income in order to buy would come as “a modest relief”.

He added: “Affordability remains attractive in many regional cities where house prices have not registered the gains seen in south eastern England. We expect prices to continue to increase in cities where housing is in reach of those on average incomes.”


Digging into the capital

Gatehouse Bank has conducted its own research into the first-time buyer market, specifically looking at the different areas of the capital, and found that areas traditionally popular with first-time buyers have seen prices rise by an average of 4.3 per cent.

This was despite the fact prices across the capital as a whole have dropped by 1.9 per cent.

It noted that areas like Hackney which rose by 5.4 per cent, Hounslow by 2.45 per cent, Merton by 3.61 per cent and Newham by 4.87 per cent, have all seen prices jump despite the capital’s house price slump overall.

Charles Haresnape, CEO of Gatehouse Bank, said most people would expect the “one silver lining” of falling prices in the capital would be that first-time buyers would find it easier to get onto the housing ladder.

He continued: “It could be that the shortage of affordable housing for first-time buyers is forcing up prices in areas where it is generally cheaper to get on the housing ladder. This continuing disparity means first-time buyers are experiencing a two-speed London, with prices moving in different directions as you cross borough boundaries.”


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