The saga of first-time buyers trying to get on the UK housing ladder is long and well documented. High interest rates, rising costs and rents which swallow up more than a third of wages – in some parts of the country – have meant that around one in three people have delayed their purchase of a home, according to the Mortgage Advice Bureau, while a fifth have taken on an extra job to cope. Nearly half have cut back on luxuries, while a third have cut back on socialising and 14 per cent have moved back in with their parents, according to new figures.
The average yearly pre-tax salary in the UK was £35,880 in July, while the average house price was eight times more, at £288,000. In 1980, the average house price was only three times the average salary. Increased housing prices, higher interest rates making monthly repayments unaffordable, and the cost-of-living crisis were among the key factors impacting homebuying plans, according to Mortgage Advice Bureau.
Around a quarter of first-time buyers have also been struggling with poor credit scores after the cost-of-living crisis, which has made it even harder for them to access an affordable mortgage. One expert described the housing market as a “pressure cooker ready to explode” after July figures from the ONS put the yearly rent rise in the UK at 8.6 per cent.
The Bank of England cut the base interest rate at the start of August and the market has priced in two further cuts to the rate this year. A total of 1.5 million n.