First-time buyers face tougher times than ever
First-time buyers are giving up hope of ever owning their own home, as property prices go through the roof.
The latest figures from Your Move and Reeds Rains show that first-time buyer completions in May were down 18.1% on the same month last year, with just 22,000 sales.
Part of the reason for the decline was buyer uncertainty in the run-up to the general election. But, says Adrian Gill, director of estate agents Your Move and Reeds Rains, "A second and more permanent root to the disappointing first-time buyer figures is the challenge of cultivating a deposit."
He adds: "Many first-time buyers are still on tight monthly incomes, struggling to save while savings rates stay so low. Meanwhile, deposits are rising primarily as property prices continue their seemingly unstoppable upwards march."
The average price of a first home in May was up 0.3% on April's figure at £153,348 and 6.7% higher than a year ago.
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Meanwhile, the average deposit now stands at £29,894 - £1,703 more than in May 2015. That's nearly two-thirds of the average annual income, making property ownership out of the question for many.
So where is affordable for young people to buy?
Research last year by estate agents Knight Frank revealed that the most affordable British city for young people to buy is Durham, which has an average graduate starting salary of over £20,000.
With a mortgage of five times income, this puts a one-bedroom flat well within reach.
Nottingham was rated the second most affordable city, followed by Liverpool, while Hastings and Canterbury featured in the south-east.
Slim pickings for first-time buyers
But the options available to potential first-time buyers get fewer every year.
"This is wholly due to a lack of housing supply versus a stack of housing demand," he says.
"If we want to see property prices stabilise and deposits fall as proportions of income, the government must address the housing supply problem, for which there is only one solution: build more homes."
This lack of affordable housing is driving young people away from the areas in which they grew up, according to Conservative communities secretary Greg Clark.
"In many parts of our country, it has become normal for young people to leave, though not out of choice. This might be to find work, but more and more, it is to find a home that they can afford," he told a Local Government Association (LGA) conference yesterday.
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