First-time buyers need to earn £54,000 a year to get on the property ladder

27 June 2019

First time buyers need an average salary of £54,400 to buy their first home in a typical UK city, new research shows.

Zoopla analysed house prices in the UK’s 20 major cities and found that the average salary needed to purchase a home had gone up by £4,500 since 2016.

Liverpool has the lowest income required to get on the property ladder at £26,000.

While first-time buyers looking to buy their first home in London need an average income of £84,000, this is £3,250 less than the amount needed in 2016 due to weak growth and price falls.

Cambridge and Oxford require the highest incomes of anywhere outside of London, at £72,000 and £68,000, respectively.

Aberdeen registered the largest percentage decrease in the income required to buy of all the UK cities. This is a result of sharp price decreases in the city following the crash in oil prices since 2015.

Leicester has seen the largest percentage increase in the income required to purchase since 2016 at 20%, followed closely by Birmingham and Manchester at 18%.

How much you need to earn to get on the property ladder 


Source: Zoopla Research

The research assumes 30% of net household income is spent on mortgage costs and a 15% deposit is put down (25% in London, Oxford and Cambridge).

Richard Donnell, research and insight director at Zoopla, says: “First-time buyers are an important group accounting for more than one in three sales. While the average household income to buy a typical home across UK cities has grown 9% since 2016, weaker price growth and recent price falls have led to a 5% reduction in the income to buy across the most expensive cities.

“It will come as a modest relief for would-be buyers although the income to purchase ratio still remains relatively high. While it is a factor behind weaker house price growth it supports underlying demand for rental homes.”

House price growth remains weak

The level of house price growth across UK cities rose by 1.8% in the 12 months to May as the rate of price inflation continues to lose momentum.

This took the average UK house prices to £218,700.

Average UK city house price growth

Source: Zoopla May 2019

Price growth ranged from 5.0% in Liverpool to -4.2% in Aberdeen with only London, Cambridge and Aberdeen registering average house price decreases.

Mr Donnell adds: “Weakening city house price growth is a result of market fundamentals. Specifically, changing affordability dynamics for home buyers and the impact of successive tax changes since 2015. Together, these have impacted household buying power, and demand for housing, hitting high priced cities more than others.

“Affordability remains attractive in many regional cities where house prices have not registered the gains seen in south eastern England. Liverpool has the lowest income required to buy and has the highest rate of price growth at 5%. We expect prices to continue to increase in cities where housing is in reach of those on average incomes.”

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