First-time buyers will have to fork out a cool million pounds to get a foothold on the property ladder in less than 20 years, data showed on Monday.
The average first-time buyer home in the UK will hit the million pound mark in the second quarter of 2024, if the current trend in house price and income growth continues, according to Stroud & Swindon Building Society.
It said that would equate to seven times the average salary, projected to be 146,188 pounds by then, if earnings continue to increase at current levels.
Those in Greater London will see the average first-time buyer property price soar above 1 million pounds the soonest — within 12 years — if house price inflation is maintained at the same rate of the past decade.
The typical first-time buyer home would hit that price within 16 years in the south-east of England and 17 years in the south-west.
Property in Scotland would take the longest to achieve that price, reaching the one million mark in 29 years.
Paul Chafer, sales director at Stroud & Swindon, said the “shocking picture of a potential future” suggested the next generation could put off buying property or other life goals, such as marriage or children, to get on the property ladder.
“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,” he said.
“Even if house price increases slow down to more acceptable levels, 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.”
The findings come after the country’s second largest mortgage lender, Abbey, increased the amount it will typically lend to up to five times income to help struggling first-time buyers.
But Chafer said it was pointless to increase income multiples if it would result in consumers taking on levels of debt they could not service.
The projections are based on Office for National Statistics figures that show the cost of an average first-time buyer home has risen 11.5 percent per annum since 1996. The average income has increased at a rate of 7.4 percent per year over the same period.