Saturday, Dec 30, 2006
FTBs need £150K for 1st rung
Easier Property: Average price paid by a first time buyer now above £150K
Only 10% of 22-29 year olds, with average full-time earnings of £33,202, had comparable income levels to first-time buyers in 2006.
Posted by nearly30 @ 10:34 PM (33 views) Add Comment
3 Comments
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1. nearly30 said...
Would love to be earning £33,202 p.a. - am lucky to get 2/3 of that figure.
Have tried damn hard since graduating in 1999 to break £22K but no luck.
Due to short term contracts - can only ever get anything between £16K and £22K.
Feels like I am always hitting the reset button - which I will be doing all over again come Spring 2007 when my current contract runs out.
Bang goes may savings - again!!!
At least I've saved on a mortgage so far and used it to pay off all my debts - £16K in total.
A silver lining there - but hard to make any long term plans unless I can get a full-time perm job under my belt.
Anyone else in my boat????
2. nearly30 said...
Here's similar take from a local paper: http://www.theargus.co.uk/news/localnews/display.var.1096418.0.first_timers_must_now_find_extra_10_000.php
"The number of first time buyers nationally hit a 26-year low this year at 315,000."
"The average house price in Brighton is now £233,803 and in Hove the figure stands at £259,547. The average price in Crowborough is a whopping £293,627 and in Chichester £266,165."
Nice!!
3. Enuii said...
I especially like this little gem hidden in the text, had to read it three times over to get the significance of it though!
'The average first time buyer (FTB) had an income of £29,610 in 2006; 35% more than the average full-time earnings of 22-29 year olds across the UK (£21,913). Five years ago, the average FTB income* was 20% higher than average full-time earnings of 22-29 year olds, while in 1997 the average income of a FTB was broadly in line with the average full-time earnings of 22-29 year olds.'
So as the average UK FTB price is now £151565 your average 22-29 year old would need a 6.5X mortgage plus deposit. If we look elsewhere (not the SouthEast) in the UK our average 22-29 year old FTB would still need his 5X mortgage.
If you look at the income figures as well we can see that your average FTB could afford his average FTB house in 1997 yet in 2006 the average FTB house is 35% more than the average 22-29 year old can afford.
There are two things that come to mind:-
1) Can the 1997 FTB find a buyer for his house in 2007
2) What will the market do when your average 22-29 year old FTB can't afford a house.
PS. NuLabour got their grubby mitts on government in 1997, this could be their biggest achievement especially when Grabbin Gordon said “No longer the boom-bust economy, Britain has had the lowest interest rates for forty years,”. Now look where that has got the propert market to, if its not a boom and bust situation then I will eat my hat as well.