New research has revealed that young people wanting to get their foot on the property ladder need to spend almost twice the average full-time salary of someone their age.
On the day the government launched its Help to Buy ISA programme, figures from the Labour Party show that a 20% deposit for an average first-time buyer home in England now stands at £42,500.
The study also found that over the past five years, the number of young people owning their own home has fallen by 21% – or 343,000 households.
And while the average salary of a young person has shrunk by almost £700 in real terms since 2010, the average house price paid by a first-time buyer has shot up over £40,000 in real terms.
John Healey MP, Labour’s shadow cabinet minister for housing and planning, said: “After five years of failure from Conservative Ministers it’s harder than ever for young people to buy a place of their own. The government’s response to this housing costs crisis barely scratches the surface.
“If you’re a young person or family on an ordinary income, then a home of your own must feel increasingly out of reach, while government plans are next to no help.
“As the Chancellor showed in the spending review last week with cuts to housing investment and affordable homes, he’s not willing to help young people with the crisis of high housing costs.”
The Labour Party said the government’s starter homes policy won’t help most young people as by 2020 they could require an income of £50,000 and a deposit of £40,000 to purchase their first home.
Chancellor George Osborne announced a raft of new measures in the Autumn Statement to help struggling first-time buyers as part of the government’s plans to build 400,000 affordable homes.
First-time buyers will also be able to get a 20% discount on 200,000 new starter homes, with £2.3 billion being spent on them in the next five years.
Help to Buy Shared Ownership will lift the limits so that anyone who has a household income of less than £80,000 outside London, and £90,000 inside London, will be able to buy a home through shared ownership.
