- Getting on the ladder is becoming an increasingly-challenging task for first-time buyers.
- Today, the average 15% house deposit could have bought around 3 properties outright in the 70s’.
Over the last 50 years, the UK economy has been slowly narrowing the goal posts for first-time buyers trying to get on the property ladder.
Whilst both property prices and salaries have increased over the last 5 decades, the rates at which they’ve are not parallel to one another.
This has made it more challenging for many people to afford their own home – especially first-time buyers.
According to data from the Office for National Statistics, the median gross weekly earnings for full-time employees in the UK increased from £7.42 in 1971 to £585 in 2021, which is an increase of over 7800%.
In contrast, the average UK house price increased from £5,632 in 1971 to £252,000 in 2021, which is an increase of over 4300%.
This means that while salaries have increased significantly over the past 50 years, house prices have increased even more, making it harder for many people to get on the property ladder.
The gap between earnings and house prices has widened, particularly in areas with high housing demand, such as London and the Southeast of England.
This trend has led to calls for government intervention to make housing more affordable, including increasing the supply of affordable homes, improving access to affordable mortgages, and regulating the housing market to prevent speculative investment.
Another factor to consider is the difficulty in saving for a deposit. The average deposit required for a first-time buyer in the UK is currently around 15% of the property price, which can be a significant amount of money.
With rising living costs and stagnant wages, many people are finding it difficult to save enough for a deposit. Additionally, the pandemic has had a significant impact on the economy, with many people losing their jobs or experiencing reduced income.
This has made it even more challenging for people to get on the property ladder, as they may not have the financial stability or security to take out a mortgage.
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