Damn right it isn't.
- For first-time buyers, the price to income ratio in England is 10 – meaning that the average property value is 10 times the average annual net salary.
- This rises to over 12 in the South East, South West and East of England, and is over 16 in London.
- For the average first-time buyer, the monthly mortgage payment was 47% of net salary in 2004 and 2014. As of 2024, this has risen by 20 percentage points to 67%.
- First-time buyers in England would have to save 50% of their discretionary income for nine years to save the necessary deposit. This rises to 13+ years for those looking to buy in the South East and London.
- After setting aside rent and bills, first-time buyers in England are facing a deposit that is more than 400% of remaining income.
Especially who wasn't Gen-X.
It comes as figures show that:
- On average households in England are now spending 33 per cent of their income on private rent, compared with home owners spending 17 per cent of their income on mortgage repayments. In many London boroughs average rents are over 50 per cent of household earnings.
- The average deposit in England is 72 per cent of an individual’s gross salary, rising to 137 per cent in London and dropping to 56.7 per cent in the North West.
- The number of homes bought and sold last year is a third lower than before 2008 as more people stay put and so reducing the opportunity for people to move up the ladder
Or didn't parents have parents with deep enough pockets to help out.
Last year, 52 per cent of UK first-time buyers had help from their parents to buy property, while the average recipient of financial help was given £55,572, according to the estate agency Savills in an analysis published this month. The size of these contributions are increasing, with mortgages so much more expensive than during the Covid years. Collectively, parents have handed their offspring £38.5 billion since 2021 — £16 billion more than in the previous four years.
Which in of itself might not be an option if things continue as they are.
The average first-time buyer deposit in the UK is around £61,000 but it varies widely depending on where you’re planning on buying a home.
Read more: UK house prices rise for third month as mortgage rates ease
It will come at no surprise that London tops the list, with prospective homeowners requiring over £100,000 just to put as a deposit. The North East is the most affordable, with a deposit of a bit over £26,000 being enough to secure a mortgage.
However, the average time it takes to save for a home deposit in England has climbed to around 10 years.
2005 Average house price: £171 000 (rounded up; £282,081.72 ) → 10 % deposit = £16 000
2005 Median yearly salary: £22,000 (38,786 adjusted for inflation)
2005 weekly rent average: £55 (£96.97 adjusted for inflation)
2024 Average House Price: £290 000 → 10 % deposit = £28 000
2024 Median yearly salary: £37,430
2024 weekly rent average: £252
The guy is correct in that prices are down to market perception. Everything relies on something else to determine valuation. Genuinely you could put the current problems with housing on immigration:
More people = more theoretical demand = higher prices.
Mortgage rates ease (can happen during economic downturn I.E. Covid lockdowns) = more incentive to buy house = more potential buyers = more demand = higher prices
High house prices = greater demand for rental property = higher rents
High house prices = higher minimum deposits
Higher prices = higher minimum deposits + higher rents = less money into savings = longer wait to start a mortgage & fewer active buyers (This
should lead to lower prices, but it's cancelled out by the others which raise them)
The last time house prices were negatively affected was during the oil crash of 2018 and the Covid period, but no much during the latter as to see a bump in house purchases — Covid measures or because the population was growing close to a million a year still and so housing demand kept high.
To drive down prices, A combination of decreasing population + lower (or non-existent) immigration + construction of more houses (or excess houses on the market) ought to do the trick.
Currently we're not in a financially well off state as a country to where people just buying in for the first time can "play the market," since those same first time buyers will be sinking the next 30 years to paying it off (alongside the 5-10 years it took to save a deposit). Their first home is likely their forever home. I can only assume that those who capable of playing it already proffered from it when times were better, but I know it's not something you paint over the plurality of people selling their homes. Their chosen price is almost entirely out of their hands if they want to get the full value of their property, whilst also paying off all the associated people who insist they need to be in the process at all. This is actually a major part of why people will just
not sell at all.
In the first three months of this year, spurred by the ending of the stamp duty holiday at the end of March, there was a spike in sales: an estimated 310,000 transactions were recorded in England and Wales (there was no holiday in the latter), up 54 per cent year on year.
Yet even this artificial, fiscally-doped high is still less than the quarterly average recorded in the decade leading up to the 2008-09 financial crisis, when 365,000 homes were transacted. In fact, the levels we saw at the start of the year were about in line with those in the early 1990s downturn — the deepest, most financially scarring market crash of modern times.
These days, about 267,000 homes sell every quarter, suggesting that today’s housing market infrastructure probably couldn’t cope with a sustained return to previously normal levels of activity.
There are other differences, too. Back in the 2000s, mortgaged movers made up a large proportion of these transactions. But their numbers collapsed following the financial crisis and, aside from a slight recovery post-pandemic, they have remained well below previous levels and those of first-time buyers.
Why are they moving less? Well, fundamentally, there’s fewer of them: middle-aged mortgaged homeowners were, historically, the biggest group of movers. After more than a decade of younger buyers being priced out of the housing market, fewer of them are becoming middle-aged homeowners. Now we have a higher proportion of older property owners, who own their homes outright — and this group has always been much less likely to move.
The only hint of optimism for buyers is the potential slow down on
price growth in the future. For decreases something will have to alter market perception drastically, which requires action, so if we see net emigration go up + number of available houses on the market then maybe we'll experience a decrease in rents and house prices.
