First-time buyers could be facing a grim future, as new research from Stroud & Swindon shows first-time buyers could be forced to pay £1m for their first home in just under 18 years.
Worrying research from the society shows that if house prices and incomes continue to follow the current growth trend, first-time buyers will find their first home hitting the £1m mark in just under 18 years.
The £1m starter home could require a worrying seven times the average salary and result in many consumers either not purchasing a home or putting off other life goals such as marriage or children to get on the property ladder. This development would also put pressure on lenders as they struggled to provide financing in a responsible and sustainable manner.
This problem is likely to hit first-time buyers in areas of the country which boast particularly strong house prices far sooner if house prices continued to increase at the current rate. Greater London in 12 years, the South East in 16 years and the South West in 17 years.
Paul Chafer, sales director at Stroud & Swindon, says: “Most people aspire to owning their own home but this research shows that our children are going to find it very difficult to get onto the housing ladder. Even if house price increases slow down to more acceptable levels, we believe that in future first-time buyers are going to be forced to put off purchasing their first home even longer and have to rely increasingly on the ‘bank of mum and dad’ to help with the deposit.
“Therefore, it is vitally important for parents to start putting money aside as soon as possible to help their children purchase their first home. In addition, mortgage providers also need to consider their lending criteria and actively work to develop products that help first-time buyers to get onto the property ladder in a responsible and sustainable manner. It is pointless simply increasing income multiples if this is going to result in consumers taking on levels of debt they cannot service.
“First-time buyers are the life blood of the housing market and we hope that this shocking picture of a potential future will force all those concerned to work towards averting this crisis.”