Couples hoping to buy their first home have to save almost three quarters of their income just to get a foothold on the property ladder.
That’s according to a study by the Royal Institution of Chartered Surveyors (RICS) which says that a couple buying for the first time must save 74 per cent of their take-home pay to make the purchase.
This will fund the £29,200 needed to meet the up-front costs on a typical home, including the deposit and stamp duty.
Hard to buy a home
But a couple in 1996 would have needed only about a quarter of their take-home pay to afford their first home.
A couple each earning an average income of £19,635 now spend 22 per cent of their income on repaying their mortgage on an average house price of £147,868 – up from 14.1 per cent in 1996.
The figures are part of RICS’ first accessibility index. The surveyors’ body predicts that it will get increasingly difficult to buy a home since prices are likely to rise by 10 per cent over the next two years.
RICS economist David Stubbs said: ‘Unless house-building levels improve, and levels keep pace with population growth and rising income and wealth, people will continue to find it difficult to access the housing market.
‘If the housing market is to become more accessible, lenders must continue to offer generous funding levels, and the government should, out of necessity, promote a significant increase in the housing stock. The financial pressures of up-front buying costs and rising energy prices will continue to create a “have – and have not” property society.’