Just 6% of UK homebuyers are under 30
New figures from the National Association of Estate Agents (NAEA) claims just 6% of homebuyers are aged between 18 and 30. That means, if their figures are accurate, a whole generation of young adults are being shut out of the property market. Soaring house prices, particularly in the South East, are clearly to blame.
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£50,000 salary plusOne London agent told AOL Money that buyers in the age group 18-30 "barely registers," she says. "We may see a few [buyers] in the new homes market, but so many new London homes are very punchily priced."
First time buyers now need an income of at least £50,000 for first-rung home ownership in a range of towns, from Cambridge to Chichester to Winchester & Woking - and more than £40,000 to buy in Basingstoke, Canterbury, Lewes, Reading & Slough claims Savills.
Recent ONS data showed that the average price of a property bought by a first-time buyer had hit more than £190,000, roughly up 10% up in the last year.
House bubble imminent?"Buyer demand typically increases in spring," Mark Hayward, managing director of the NAEA, told Thisismoney, "but we are seeing a remarkable number of house hunters registering with our member agents this month. The last time we saw this level of market demand was pre-crash, back in August 2006."
Recently accountants Pricewaterhouse Coopers claimed the average price of the UK home could shortly climb to £285,000 and £560,000 in London. The pressure is so bad that Lloyds Bank has now tightened loan lending to a maximum of four times income on properties worth £500,000 or over.
Last month did see one nugget of good news though: 28% of those completing house purchases in April were first time buyers, compared to 25% recorded in March. But some of these purchases will be backed by the bank of Mum & Dad plus, very possibly, grandparents.
And there's now real worry that many are buying near the top of the market. Recent figures from the Council of Mortgage Lenders showed that lending to first-timers for high value properties had crept past pre-crisis levels.
750,000 under pressurePush outside the capital and there are still areas of the UK where house prices have yet to regain their pre-crisis high. Regional interest rates is one idea mooted that could help control local price disparities - but it would be hugely difficult to administer, and possibly bringing its own set of problems.
Meanwhile recent research from the Resolution Foundation think-tank claims one in four would be under huge financial strain after just a modest Bank of England rate rise. It thinks more than 750,000 households would find monthly repayments taking more than a third of their disposable income by 2018.