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First-time buyers 'need to earn £64,000 by 2020 to get onto property ladder'

Published 14/04/2016

Shelter said average first-time buyers will need to raise a deposit of 46,000 pounds by 2020
Shelter said average first-time buyers will need to raise a deposit of 46,000 pounds by 2020

First-time buyers will need to earn £64,000 by 2020 to get onto the property ladder, according to calculations from Shelter.

The charity said average first-time buyers will also need to raise a deposit of £46,000 to chip in for the cost of the home they want to buy, which it expects to be £270,000 in 2020, compared with a price tag of around £220,000 now.

In London, aspiring first-time buyers would need an annual salary of £106,000 - and find a deposit of £138,000 - to buy a typical home worth £558,000 in 2020, Shelter predicted.

The current price of a typical first-time buyer home in London was put at £419,000.

The amount that a first-time buyer would need to earn to get on the property ladder could be either as a single salary or from two or more people's wages combined, Shelter said.

Shelter's calculations are based on people typically needing to put down a deposit amounting to 17.1% of the property's price. In London, where property prices are much higher than elsewhere, it was assumed buyers would need a deposit of 24.8% of the property's price.

The average mortgage that is handed out as a multiple of someone's income was also factored into the calculations.

Shelter's projections for first-time buyer property prices over the next four years are based on a combination of previous academic research and official house price figures.

Campbell Robb, Shelter's chief executive, said the figures underline the need for investment " in homes that people on ordinary incomes can actually afford to live in".

A Department for Communities and Local Government spokesman said the Government has committed to deliver 200,000 new starter homes, which will offer at least a 20% discount to first-time buyers.

He said: "We've already helped 291,000 people to buy through Government-backed initiatives and doubled the housing budget to help build 400,000 affordable homes."

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