First-time buyers will have to earn £64,000 per year to buy a house by 2020

/, News/First-time buyers will have to earn £64,000 per year to buy a house by 2020

First-time buyers will need to show an annual salary of £64,000 by 2020 to buy their first home, according to data from Shelter.

This means that first time buyers should consider taking the plunge more quickly than they might have planned.

The charity reported that average first-time buyers will also need to save a deposit of £46,000 to contribute to the cost of the home they want to buy, which it expects to be over £270,000 in 2020, compared with a value of around £220,000 now.

In London, hopeful first-time buyers would require an annual salary of £106,000 – and find a deposit of £138,000 – to purchase a typical home worth £558,000 in 2020, Shelter predicted.

The current cost of a typical first-time buyer home in London was recorded at £419,000.

The amount that a first-time buyer would need to earn to get on the property ladder could be either as a single salary or from two or more people’s wages combined, Shelter said.

Shelter’s calculations are based on people typically needing to put down a deposit amounting to 17.1% of the property’s price. In London, where property prices are much higher than elsewhere, it was assumed buyers would need a deposit of 24.8% of the property’s price.

The average home loan that is handed out as a multiple of someone’s income was also considered in the calculations.

Shelter’s predictions for first-time buyer property prices over the next four years are based on a combination of previous academic research and official house price figures.

Campbell Robb, Shelter’s chief executive, said the figures underline the need for investment “in homes that people on ordinary incomes can actually afford to live in”.

If you are looking to get on the property ladder, speak to Frost Financial today and let one of our friendly advisers find the best mortgage deal for you.

2016-04-14T10:11:06+00:00 April 14th, 2016|Mortgage Advice, News|