Research conducted by the building society revealed that if house prices and income continued at the same pace, FTBs would find their first property reaching the £1 million mark by 2024.
Within London, the study indicated the average FTB property could cost £1 million within 12 years, while it was expected to take 29 years for the average property in Scotland to reach the £1million price mark. Within Greater London it was expected that for FTBs to be able to afford to purchase a property, the average income multiple would have to be six times income. In Northern Ireland, the average income multiple required would be 10 times.
Commenting on the findings, Paul Chafer, director at Stroud & Swindon BS, said: “Most people aspire to owning a home but this research shows that our children are going to find it very difficult to get onto the housing ladder. Even if house price increases slow down to more acceptable levels, we believe that in future FTBs are going to be forced to put off purchasing their first property even longer.”
He added: “Mortgage providers need to consider their lending criteria and actively work to develop products that help FTBs onto the property ladder in a responsible and sustainable manner. It is pointless simply increasing income multiples, if this is going to result in consumers taking on levels of debt they cannot service.”
Alan Lakey, senior partner at Highclere Financial Services, commented: “All of Stroud & Swindon’s figures depend on inflation. If it continues in the same way then new innovative products will have to be launched, or there will have to be a re-think on how people pay back their mortgage.”
