That’s according to Skipton Group, which added that only one in eight potential homebuyers in Great Britain can afford the average first-time buyer property in their area.
For those earning £22,850 per year or less, this figure falls to just one in 100. But even at the other end of the scale, for those earning over £71,250, only 44% can afford to buy their first home in their local area.
The group’s Home Affordability Index highlights the “stark reality of securing a home in Britain today”, said Skipton. The new index combines the deposit cost, the cost of buying and running a property to gauge its real affordability.
It found that nearly four in 10 renters spend 45% or more of their income on essential housing costs, creating a major barrier to saving for a deposit.
Regions and nations
The new index revealed that first-time buyers’ affordability levels are worst in the West Midlands, driven by a combination of low deposit levels and moderate house prices. They also struggle in London, due to high house prices, and Wales, because of lower income levels.
First-time buyers face the best affordability in Scotland, due to lower house prices, and the East of England, where income-to-house-price ratios are better than average.
Stuart Haire, Skipton Group’s CEO, said: “Our findings paint a bleak picture, notably for first-time buyers. The combination of high housing costs, insufficient savings, and significant regional disparities underscores the urgent need for collaborative and targeted interventions to support aspiring homeowners.
“The scale of [the] challenge of housing affordability is so great that no one person can lead that charge, so we are calling on the Government to work cross-department, cross-Whitehall, cross-sector and cross-industry, so that together we can really start to solve an issue that impacts so many people. We stand ready to be part of those efforts”.
Alex Stewart, associate director of Oxford Economics – which produced the index with the Skipton Group – added: “The economic shocks of the last four years have led to fluctuations in the index, but our analysis shows that housing affordability today is broadly unchanged compared to the start of this decade.
“For those who want to explore affordability in their area, Skipton’s interactive tool brings the challenge to life, allowing first-time buyers and existing homeowners the chance to see where they might be able to afford.”
