Spiraling house prices and sluggish wage growth have made buying property an elite activity, according to a report from the National Housing Federation (NHF), which represents Britain’s housing associations.
The NHF report, which has the rather melodramatic title ‘Broken Market, Broken Dreams’, says the mortgage to salary ratio has doubled since 1979, with average borrowing now 3.4 times annual income. The average deposit, meanwhile, has grown tenfold in real terms to £30,000, from close to £3,000 in 1980.
The result has been a greater dependence on parental wealth, with two thirds of first-time buyers receiving support from their families, which the report says is double what it was five years ago.
‘Home ownership is quickly becoming an exclusive members club,’ said David Orr, chief executive of the NHF. ‘Sadly, it will depend on the wealth of the family you were born into as much as your own hard work.’
The situation’s not getting any better, it seems. While wage growth remains stagnant, house prices continue to rise. Asking prices increased by 0.9% in September, according to a report from Right Move out today. That's the first time they have risen at this time of the year since 2011, providing further evidence of the housing market recovery. Good news for homeowners, but not so much for first time buyers.