Research: What salary will a typical first-time buyer need in 2020?

By: Sara Mahmoud  Published: April 2016


This research asks what, on average, a first-time buyer may have to earn annually in order to access a mortgage on a typical property by 2020 if prices rise in line with recent projections. It also explores what hope there is for wages to catch up by examining how local house prices have grown compared to local earnings over the last five years.

Summary

House prices continue to soar, with the latest ONS house price index indicating that between February 2015 and February 2016, the average cost of a home for first-time buyers in the UK rose by 8%.

This research looks ahead, asking what, on average, a first-time buyer may have to earn annually in order to access a mortgage on a typical property by 2020 if prices rise in line with recent projections. We find that typical first-time buyers in the UK are expected to need to earn £64k a year. On top of this they would need a deposit of £46,000.

It also explores what hope there is for wages to catch up by examining how local house prices have grown compared to local earnings over the last five years. Between 2010 and 2015, house prices in the UK rose six times fasted than the median full-time salary, suggesting first-time buyers will continue to struggle if things continue as they are.

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