Rising house prices are making it virtually impossible for first-time buyers to get on the housing ladder, with some cities becoming “unaffordable blackspots”, a new study has revealed. According to Post Office Money Mortgages, a third (36%) of homes in the UK – equivalent to 5.5 million properties – are now in areas where the […]
Rising house prices are making it virtually impossible for first-time buyers to get on the housing ladder, with some cities becoming “unaffordable blackspots”, a new study has revealed.
According to Post Office Money Mortgages, a third (36%) of homes in the UK – equivalent to 5.5 million properties – are now in areas where the average home is unaffordable for first-time buyers.
This is a trend that is getting worse, with hundreds of neighbourhoods falling out of reach over the past 20 years.
Brighton was found to be the most unaffordable city in the study, with only 9% of properties in the city within reach of those looking to get a foot on the property ladder, compared to 100% in 1995.
Homes in the city have increased in value by 463% over the past 20 years and now stand at an average of £305,149.
Meanwhile, Southampton, less than 70 miles further along the coast, is one of the most affordable spots for first-time buyers, where properties cost an average of £183,443.
Although London has a higher proportion of neighbourhoods where the average home is affordable to first-time buyers than some other cities, they still face the biggest leap to reach the first rung of the ladder, with the average property in the capital reaching almost half a million pounds (£498,174) – or the equivalent of 6.41 times their income.
It is little wonder that first-time buyers are struggling to find their feet in the housing market, with the average house price increasing by 306% over the past 20 years. And while the average first-time buyer’s income has also increased over this period (by 159%), a typical property is now worth as much as 5.51 times as much as this.
The Priced Out report explores affordability of properties across the UK for first-time buyers, and how this has changed over the past 20 years in 14 of the UK’s largest cities.
John Willcock, head of mortgages at Post Office Money, said: “These figures highlight the challenges facing today’s first-time buyers. Cities such as Brighton are becoming unaffordable blackspots for those looking to get on the ladder, with average property prices far beyond the typical budget. The London property market has always been more challenging for new buyers to break into, which is why many instead turned to surrounding areas within a commutable distance – which in turn are becoming increasingly unaffordable.
“Many would-be buyers are having to compromise on their housing needs in order to take that all-important first step onto the ladder. For some, this is a case of prioritising what is really essential in a home, but for others this means significant changes to their lifestyle, moving further away from work, family and friends. The earlier people start to plan and save for the future, the closer their housing reality is likely to be to their goal.”
| Percentage of affordable properties in cities – 1995 compared with 2015 | ||
| City | 1995 | 2015 |
| Birmingham | 96% | 82% |
| Brighton | 100% | 9% |
| Bristol | 95% | 56% |
| Cardiff | 90% | 48% |
| Leeds | 91% | 68% |
| Liverpool | 97% | 87% |
| London | 81% | 41% |
| Manchester | 95% | 86% |
| Newcastle | 93% | 76% |
| Norwich | 100% | 93% |
| Nottingham | 100% | 89% |
| Plymouth | 100% | 84% |
| Sheffield | 97% | 80% |
| Southampton | 100% | 94% |
