Affordability for first-time buyers falls 351%

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by Kay Murchie

According to figures from the Royal Institution of Chartered Surveyors (Rics), affordability for first-time buyers has fallen by 351% over the last 10 years.

Currently, a first-time buyer couple, both on lower quartile earnings (amounting to £26,595 after taxes) would have to save 104% of their salary in order to secure a property.

As well as a deposit, stamp duty and legal fees, the couple would have to pay £27,729 for an average property, making it virtually impossible for many. Back in 1996, the same couple would have to commit just 23% of their salary.

David Stubbs of Rics said first-time buyers are finding it even tougher to get onto the property ladder and the indications are that the situation will not improve in the short-term.

Mr Stubbs continued by saying monthly mortgage repayments are also a problem for many. Those who are struggling with mortgage repayments are still faced with paying a large percentage of their earnings. If the Bank of England cuts interest rates next week, it will be a huge relief for many homeowners concluded Mr Stubbs.