Why it could take first-time buyers over 100 years to save enough to get a mortgage

Posted 28 October 2015 by Nick Parkhouse

People looking to buy their first property are finding a huge gap between their earnings and deposit requirements in some regions...

Saving enough money for their mortgage deposit is one of the main challenges facing first-time buyers in the UK today. Now, research has revealed that the price of homes has risen so much in some areas of the country that it would take the average first-time buyer over 100 years to save the deposit they need.

With huge regional differences, the gap between average earnings and house prices is growing in some parts of England.

New research from an online estate agent has revealed that certain would-be first-time buyers are struggling to afford properties in their home towns. The research compared the average earnings in 20 English cities with the cost of an average priced home to work out which areas were most affordable.

The figures were then calculated on the basis that savers could put aside 10% of their salary every year for their deposit and that the maximum mortgage loan they could secure would be four-and-a-half times their gross annual salary.

The research found that it was the south of England that was least affordable to the average first-time buyer. With an average wage of £23,488 it would take a worker in Brighton over 104 years to save enough deposit to buy an average priced property in the city at £350,222.

In Bristol an average worker on £27,394 would have to save for 55 years to afford an average priced property (£274,280).

The most affordable cities were, perhaps unsurprisingly, in the North of England. Workers in Hull would only need to save for 6.1 years to have enough for their mortgage deposit, as the average salary is £24,248, and average house prices are just £123,864.

The average worker in Bradford on a salary of £24,743 would have to save for seven years to build up the deposit they would need to get a first-time buyer mortgage while it would take around 11 years in Sunderland and 14 years in Liverpool.

Alex Gosling, CEO of online agent Housesimple, which carried out the research, says: “Affordability remains a major problem across the UK. Everyone knows that London is unaffordable for all but the rich or fortunate, but these figures highlight the plight of the average person looking to buy an average priced property in their local town or city.

“The average wage earner is being priced out of their local property market, and without a serious influx of new properties coming onto the market, that’s likely to continue to remain the case.”


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