Workers on lower incomes could face a wait of more than 100 years before their dreams of home ownership become a reality, according to Housesimple.
The online estate agent has highlighted 30 jobs, including retail cashier, childcare worker and bartender, where the average salary would require the worker to save for at least 100 years before they would have enough for a house deposit. This figure assumes no financial help from loved ones.
The problem stems from the rigorous lending criteria that mortgage providers currently apply, as well the higher average cost of housing in the UK.
For example, a hairdresser or barber earning an average £14,673 per year would be able to borrow a maximum mortgage of £58,692 (4.5 times their earnings). With the average house in the UK priced at £226,351, the individual would require a deposit of £167,659. If they put aside 10% of their net income each year towards this, it would take 125 years and five months to save enough to buy a home.
Sam Mitchell, chief executive of Housesimple explains: “Although house price growth has slowed, particularly in London, affordability still remains a major problem in many parts of the UK. The government has launched a number of schemes such as Help to Buy, Right to Buy, Shared Ownership, and Lifetime Isas, but more needs to be done to help people on lower incomes.
“Clearly, no-one is going to be saving for 100 years to buy a property, but these illustrative figures do provide a stark picture of the struggle many buyers working in low paying, but essential jobs, face when it comes to buying a home. Of course, there are many areas of the country where house prices are nowhere near the UK average of £226,351 and will be within reach of people on lower incomes.”
Even in regions such as the North East, where the average house price is much more affordable at £128,680, it would still take the lowest earners up to 54 years to save enough to buy. In London it would take 320 years to save for an average house worth £478,853.
Mr Mitchell adds: “What about those people who are working as cleaners, cooks, hairdressers, in parts of the country such as London and the south, where house prices have boomed since 2008?
“These services are still essential, but the wages don’t reflect the higher cost of living. For many of these people, they are either looking at a lifetime of renting or relying on help from family members to even consider getting a foot on the ladder.”
See the table below for the 30 jobs that would take at least 100 years to save enough for a house deposit:
|Job||Gross annual salary (£)||Maximum mortgage loan of x4.5 salary (£)||Size of deposit for average property (£)||10% net salary put aside every year for deposit (£)||No. of years to save required deposit|
|Hairdressers and barbers||£14,673||£58,692.00||£167,659.00||£1,335.90||125.5|
|Waiters and waitresses||£14,833||£59,332.00||£167,019.00||£1,346.70||124.0|
|Launderers, dry cleaners and pressers||£15,329||£61,316.00||£165,035.00||£1,380.50||119.5|
|Kitchen and catering assistants||£15,402||£61,608.00||£164,743.00||£1,385.40||118.9|
|nursery nurses and assistants||£15,607||£62,428.00||£163,923.00||£1,399.40||117.1|
|Cleaners and domestics||£15,901||£63,604.00||£162,747.00||£1,419.40||114.7|
|School midday and crossing patrol||£16,166||£64,664.00||£161,687.00||£1,437.40||112.5|
|Fishmongers and poultry dressers||£16,181||£64,724.00||£161,627.00||£1,438.40||112.4|
|Educational support assistants||£16,217||£64,868.00||£161,483.00||£1,440.80||112.1|
|Pharmacy and other dispensing assistants||£16,226||£64,904.00||£161,447.00||£1,441.50||112.0|
|Vehicle valeters and cleaners||£16,956||£67,824.00||£158,527.00||£1,491.10||106.3|
|Care workers and home carers||£17,512||£70,048.00||£156,303.00||£1,528.90||102.2|
|Packers, bottlers, canners and fillers||£17,830||£71,320.00||£155,031.00||£1,550.50||100.0|
Source: Housesimple, August 2018