First-time buyers paying 191% more than parents did in 1990s
My Home Move Conveyancing Director, Alistair Singer, says average earnings-to-house-price ratio has more than doubled from 4.0 to 8.1 adding more pressure than ever on those looking to start their home-owning journey.
The cost of getting on the property ladder is 191% higher for the average first-time buyer compared to what their parents would have paid in the ‘90s, research from My Home Move Conveyancing reveals.
Over the past four decades the average earnings to house price ratio has more than doubled from 4.0 to 8.1 adding more pressure than ever on those looking to start their home owning journey.
AVERAGE AGE
Today’s first-time buyer is typically aged 33 and their parents 62 – coincidently meaning they themselves would have been 33 in 1995 when the average age of a first-time buyer was also 33.
But the doubling of house price to earnings ratio has created more barriers to home ownership.
Research from My Home Move Conveyancing estimates the average UK house price in the ‘90’s at £60,551- equivalent to £119,189 today. Meanwhile, the average annual salary in the ‘90s was £15,034 – or £29,593 today once adjusted for inflation.
That puts the price of a home in the ‘90s at four-times the average salary – giving an affordability ratio of 4.0.”
That puts the price of a home in the ‘90s at four-times the average salary – giving an affordability ratio of 4.0.
Today’s average house price of £280,660 and an average annual salary of £34,637 means that the price of a home is 8.1 times the average earnings – more than double compared to the ‘90s.
PAY MORE
Now, the average price paid by a first-time buyer sits at £223,554, requiring a deposit of £33,533 meaning first-time buyers are having to pay 191% more than their parents did in 1995 even after adjusting for inflation.
Alistair Singer (main picture), Director, My Home Move Conveyancing, says: “Today’s first-time buyers are facing a significant struggle as house prices have boomed to record highs in recent years, while earnings have struggled to keep pace.
“Add to this the initial barrier of a higher mortgage deposit, the new norm of significantly higher mortgage rates and often tighter criteria from lenders and it’s a very tough time indeed when it comes to buying your first home.”
