New figures provide further evidence of the difficulties first time buyers have getting on the property ladder – and why as a result the rental market is likely to continue to boom.
Property company Wayhome says that on an analysis of Zoopla data, average UK house prices surged by more than £40,000, from £215,127 to £256,535, over the past five years.
That’s an average annual growth of 3.5 per cent.
Meanwhile the average salary for full-time employees increased from £33,644 to £38,600 in the same period – annual growth of 2.7 per cent.
Subsequently, Wayhome calculates that the rise in house prices will add an additional five years for a first-time buyer working full-time to raise a typical deposit, without any other financial support.
It will now take employees 15.7 years to save for a deposit rather than 10.4 years – an increase of 50 per cent.
Wayhome chief executive Nigel Purves says: “This highlights the worsening state of the UK affordability conundrum.
“Average earnings and salaries for full time employees have not matched the inflation of house prices in recent years, meaning people are having to save for increasingly longer periods of time before they can afford to own a property.
“This means that the those in full time employment face the reality of needing to save for more than fifteen years before they can think about buying. Even when they have the deposits required, strict lending criteria is also prohibiting the possibilities even further.
“With potential homeowners being priced out of property in their own areas and the deficit in growth between earnings and house prices only widening, it is clear that the UK property market needs to adapt and focus on finding new solutions to combat the current property landscape.”