First-time buyers could have to pay £1million for a starter home in 17 years time, according to new research from Stroud & Swindon.
The lender has found that if house prices continue to follow the current growth trend, FTB’s would find their first home hitting the £1m mark in 2024.
This high cost would be most likely to hit FTB’s quicker in areas like Greater London (11 years), the South East (15 years) and the South West (16 years).
In 2006 it was estimated that a Northern Irish FTB property would cost £1m in 2025, however due to rapid house price growth over the past 12 months, this is now predicted to occur in 2018 – 7 years sooner and on a par with London.
Other regions where high house price growth has led to predictions coming forward are Scotland (-4 years), North East (-4 years), Wales (-3 years) and Yorkshire and Humberside (-3 years).
The £1 million starter home could require a worrying seven times the average first time buyer income (2024 – £136,074) and result in many consumers either not purchasing a home or putting off other life goals such as marriage or children to get on the property ladder.
Stroud a& Swindon sales director Paul Chafer comments: “This forecast paints a worrying picture for the future of the housing market. The data shows that getting onto the first rung of the property ladder is set to get even harder in coming years. Most people assume they will own their own home at some point in the future, however the results of our research shows that our children are going to find it very difficult to afford it.
“Mortgage providers also need to consider their lending criteria and actively work to develop products that help first-time buyers to get 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.”