Study predicts house prices will increase by 112% in 31 years' time
A newborn in the UK today would require an annual income of £95,121 to afford their first home, research conducted by estate and letting agency group Lomond has revealed.
The figure arises from projections indicating that the average price for a first-time buyer’s property will escalate by 111.9% by the time these newborns reach the typical first-time buyer age of 31.
The research suggests that by the year 2055, the average first-time buyer house price could surge from today’s average of £237,655 to an astounding £503,584.
This sharp increase would necessitate a mortgage deposit of £75,538, assuming the standard 15% of the property’s price, coupled with a significant income of £95,121 to secure a mortgage at the common borrowing rate of 4.5 times the buyer’s income.
In London, the forecast is even more daunting, with the average first-time buyer house price predicted to reach nearly £1 million by 2057. This estimate suggests a deposit requirement of £144,630 and an income of £182,126 for those aiming to purchase their first home in the capital. The South East and East of England are also expected to witness substantial increases in house prices, placing them among the highest in the country.
The report further highlights the East Midlands as the region predicted to experience the most significant increase, with estimated growth of 125.9% by 2055. The West Midlands follows closely, with a projected increase of 123.9%.
“It seems quite unbelievable that a baby born today could face paying half a million pounds for their first home, but you would probably have thought the same 30 odd years ago had someone told you the price of property today,” said Ed Phillips, chief executive of Lomond. “What it certainly highlights is that Britain is home to one of the most robust and desirable property markets on the global stage and investing in property is almost always going to be a safe bet.
“We do, however, need to see the issue of supply and the insufficient level of new homes being delivered addressed, if our children are to ever have a chance of realising their own ambitions of homeownership.”
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