FTBs face Hard Times in Struggle to Get on Housing Ladder....
07 September 2007
First-time buyers (FTBs) may have to save 96 per cent of their income to save up enough money to buy their own home, new figures from the Royal Institution of Chartered Surveyors (Rics) have claimed.
Acccording to the organisation's accessibility index, the cost of buying a home has worsened by an incredible 350 per cent since 1996, when the UK housing market was deemed to be more accessible.
An FTB couple on salaries of £25,899 will now have to raise up to £25,600 to cover the buying costs, deposits and stamp duty on their new home, Rics calculated.
London, the south-east and the south-west of the UK are the most difficult places for the average FTB to buy a home, with couples having to save over 100 per cent of their pay to get a foot on the property ladder.
However, further north in Yorskshire and Humberside, couples only need to save 73 per cent of both their incomes to be able to set up home together in their own place.
Rics senior economist David Stubbs, said: "First time buyers are facing an enormous struggle to access the housing market. This may worsen if the turmoil in the US market forces mortgage providers to tighten lending criteria and demand even higher deposits.
"Even if prospective first time buyers make it onto the market, they face mortgage payments which take up a higher percentage of their take home pay than at any time since 1990.
"House prices have risen by over 11 percent a year since 1996 whereas first time buyer incomes have only risen by 3.5 percent a year. This has forced buyers to borrow ever greater amounts and now higher interest rates are applying pressure to the household finances of recent buyers," he added.
