If you're hoping to get on the property ladder in the next few years, you might want to read this! While we all know how difficult it has become to save for a deposit thanks to soaring property prices, new research from Shelter has confirmed just how unattainable getting a mortgage can be for first-time buyers.
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The organisation calculated the salary that first-time buyers need to be earning right now if they want to own a house in the next three years – and it's over twice the national average. According to Shelter you would need to be earning £64,000 a year to buy a house in 2020, with UK-wide house prices projected to rise to £270,000 over the next three years.
Shelter has estimated we need to be earning £64,000 a year to buy a house
Bearing in mind that the UK average salary is currently £27,600 according to the Annual Survey of Hours and Earnings, this means on average we're all £36,400 below the income we need. For people hoping to buy in London things look even bleaker, with the income needed by 2020 predicted to be £106,000 – some £73,000 more than the average £33,200 per year salary in the capital.
The figures were projected in 2016, taking into consideration the size of mortgage a person would need based on the growing average cost of house prices by 2020, along with the money they'd need for a deposit. However the figure doesn't seem to account for the Help to Buy 5% deposit scheme, which many first-time buyers can access to make owning a home more attainable.
House prices have risen six times faster than wages
Over the past five years, the country's severe housing shortage has seen house prices rise six times faster than wages, meaning fewer and fewer people have been able to buy their own homes, and are renting instead. Speaking about the figures, Campbell Robb, Shelter's Chief Executive, said: "With the situation only set to get worse, Generation Rent will be forced to resign themselves to a life in expensive, unstable private renting, and wave goodbye to their dreams of a home to put down roots in.
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"It doesn't have to be like this. The Government has the power to turn our housing crisis around, but only if they stop with schemes like Starter Homes which only help higher earners, and start investing in homes that people on ordinary incomes can actually afford to live in."