Earnings of £60,600 required for first-time buyers in UK, Zoopla analysis shows
Zoopla estimated that the typical first-time buyer needs earnings of £60,600 - which it said is £14,900 more than five years ago and £2,400 more than a year ago.
According to a study by property website Zoopla, the average first-time homebuyer now requires a household income exceeding £60,000 to step onto the property ladder. The research suggests that typical first-time buyers need earnings of £60,600, an increase of £14,900 from five years ago and £2,400 more than last year.
This calculation is based on the average asking prices for first-time buyer homes listed on Zoopla, which are around the £250,000 mark. The assumption is that buyers would have a 20 percent deposit and be borrowing 3.3 times their income as a mortgage.
Zoopla's senior property researcher, Izabella Lubowiecka, commented: "The challenges facing first-time buyers are not the same across the UK."
She noted that access to homeownership requires lower incomes in much of Wales, northern England, and Scotland. However, the greatest hurdles are in southern England, particularly London, where first-time buyers are already purchasing cheaper homes than the average in an attempt to improve affordability.
In London, first-time buyers would typically need a household income of £103,000, according to Zoopla. In contrast, they would require £38,800 in Wales and £31,500 in Scotland.
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These findings were released following the Office for National Statistics (ONS) figures published this week, showing that Consumer Prices Index (CPI) inflation slowed to two percent in May, down from 2.3 percent in April.
A recent "property tracker" survey by the Building Societies Association (BSA) revealed that over half (56 percent) of respondents believe the deposit required to purchase a property is too high, with this figure rising to nearly two-thirds (63 percent) among first-time buyers.
Almost seven out of 10 (68 percent) participants expressed concerns about the affordability of monthly mortgage repayments, viewing it as an increasing barrier to home ownership.
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Similarly, 65 percent identified raising a deposit as a significant hurdle.
The Bank of England is set to announce its latest interest rate decision on Thursday. However, experts have suggested that despite slowing inflation, we should not anticipate an immediate reduction in interest rates from the current 5.25 percent.
Paul Broadhead, head of mortgage and housing policy at the BSA, commented: "Borrowers will be disappointed that the bank rate is expected to remain unchanged today, as a cut would have provided a little much-needed optimism to homeowners and first-time buyers."
The BSA survey was conducted by YouGov across Britain in June, with over 2,000 people participating.