First-time buyers need £64k salary to afford a home by 2020
First-time buyers will need a salary of £64,000 and a deposit of £46,000 to afford an average first-time buyer home by 2020, according to research by Shelter.
The housing charity warns that this is an increase of nearly a fifth on the £52,000 salary needed for a typical first-time buyer home today.
But this compares to an average UK wage of just £27,500 in 2015, according to the latest Office for National Statistics data.
The rising cost of houses – the latest data from Halifax shows prices rose by 10% in the year to March to £214,811 – means that many are struggling to get onto the housing market.
And it’s not just those in their twenties and thirties who are struggling, Moneywise reports how many people in their forties are still renting due to unaffordable house prices.
See our guide on Mortgage help for first-time buyers and my column on why first-time buyers should clean up their credit scores.
‘Generation Rent to wave goodbye to their dreams of a home’
As a result of the housing shortage, Shelter is calling on the government to commit to building homes that people on ordinary incomes can actually afford.
Campbell Robb, the charity’s chief executive, says: “When house prices are increasing six times faster than the average wage, it’s no wonder people on ordinary incomes are being locked out of a home of their own.
“With the situation only set to get worse, Generation Rent will be forced to resign themselves to a life in expensive, unstable private renting, and wave goodbye to their dreams of a home to put down roots in.
“It doesn’t have to be like this. The Government has the power to turn our housing crisis around, but only if it stops with schemes such as Starter Homes, which only help higher earners, and starts investing in homes that people on ordinary incomes can actually afford to live in.”