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


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."