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Buying a house is most affordable at age 40 – HBB

by: Noora Ismail
  • 15/06/2023
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Buying a house is most affordable at age 40 – HBB
Buying a house is most affordable for people in their 40s, research from a real estate consultant has shown.

House Buyer Bureau (HBB) used data from the Office for National Statistics to assess the average earnings, average house prices and the income to house price ratio for people in their 20s, 30s, 40s and 50s.

It found that as the average 18-21 year old earns £13,237 per year, the average house price of £285,009 would require them to earn 21.5 times their annual income to cover a mortgage.

Those in their 20s earning an average of £26,800 would need 10.6 times their income which still sits outside of mortgage affordability.

Workers between 30 and 39 would need 8.3 times their average salary of £34,226 to afford payments. The average first-time buyer age has now reached 37 and if house prices remain high, HBB said affordability could remain out of reach for aspiring homeowners until they reach their 40s.

The average annual income for some in their 40s is £38,574 requiring 7.4 times their income to cover the average UK house price. Ratios increase again for those aged between 50 and 59 requiring 7.9 times their income, at an average of £36,156. Those in their 60s or above would need 10.5 times or higher to cover their average income of £27,090.

 

’40 is the new 30′

Chris Hodgkinson, managing director of House Buyer Bureau, said: “40 could well be the new 30 when it comes to the decade that many homebuyers finally make it onto the ladder, as house prices show no signs of falling by any significant margin any time soon, not to mention the fact that the cost of borrowing continues to climb.

“However, this might not be the worst thing as our research shows that your ability to climb the ladder is significantly improved during this stage of life. For those looking to buy it also means that they may well be able to borrow the sum required for their dream home, rather than making do with a second best home they can afford at a younger age.

“What’s more, the cost of borrowing is generally lower between the ages of 30 and 50 and so repaying your mortgage each month is also likely to be the most manageable it will ever be.”

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