Entry level properties have increased in price by 20% in 10 years
More people in the UK now rent rather than becoming homeowners for the first time because they are being priced out of the market in the area where they live, with the latest data showing that many people cannot afford to buy because their wages fall well below the affordability line.
This has been caused by the drastic rise in the cost of homes that would typically be bought by newcomers to the market over the last decade, which has meant that people who would normally buy such properties can simply not afford to.
According to the findings from the Office of National Statistics (ONS), over the course of the last ten years, the price of property has increased by 20 per cent for homes that would be bought by new buyers. It means that the average new buyer home cost is now sitting at £140,000, while they would have to pay an average of £180,000 for a new build.
The ONS also looked at data for affordability based on what people would need to earn in order to get themselves onto the property ladder. It said that nationwide, this would amount to more than £26,000 to be able to afford a deposit of 15 per cent, plus the purchase itself.
In London, this rises again to almost £60,000 that people would need to earn just to be able to afford a first-time buyer home. Such high requirements in terms of income means that a great many people across the country are still being priced out of the market.
According to the ONS, the least affordable place in the UK is, unsurprisingly, in London, with the borough of Wandsworth requiring people to have earned as much as £89,000 a year just to be able to get onto the property ladder.
Meanwhile, the most affordable is in Wales, where people are able to get themselves a home for the first time at a much more reasonable overall price.
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28-February-17General Lettings News