According to Firstrung, the median salary in the UK rose by £6,500 in the past decade while average house prices trebled. Only FTBs currently earning 50 per cent above the median wage would be in a position to afford the average FTB mortgage based on the Council of Mortgage Lenders’ (CML) latest figures.
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The results illustrated that FTB affordability had reduced by almost 46 per cent over the past decade. The research involved an average UK salary in 1997 of £16,666 – using Office of National Statistics data – while the average FTB advance reached £41,800, according to the CML.
Yet in 2006, the average FTB wage was £23,249 while the CML stated the average FTB salary as £33,977.
Paul Holmes, operations director at Firstrung, said: “While the CML figure reflects the evidence of those who can afford to take the first step onto the property ladder, this discrepancy is 46 per cent in relation to average median wages, representing the largest difference in our study.
The CML currently suggests an average advance for FTBs of £108,000. On its analysis this would represent an income multiple of 3.2. However, versus the official national average wage, this would now be 4.7 times average salary.”
Matt Grayson, head of PR at BM Solutions, said: “We acknowledge that there are affordability problems but there are two sides to FTBs – previous owner occupiers, and those that are buying for the first time. They both face challenges.”
