£54,000 Average Income Required to Get on the Housing Ladder

First-time buyers wanting to get on the property ladder in major cities in parts of the UK need an average household income of £54,000, according to recent data collected by Zoopla. The average household income required to buy a typical home in the UK has risen by 9% since 2016 of which has been largely due to higher house prices.

In contrast, it will come as a relief to buyers in more expensive cities such as London where the income requirement level has experienced a 4% decline over the same period. A Zoopla spokesman commented that “Weakening city house price growth is a result of market fundamentals. Specifically, changing affordability dynamics for home buyers and the impact of successive tax changes since 2015. Together, these have impacted household buying power, and demand for housing, hitting high priced cities more than others.”

Affordability in Certain Cities

The report looked at the UK’s 20 biggest cities and there are certain cities which remain affordable, such as Liverpool, which had the lowest gross household income needed for first-time buyers at £26,000. Despite being the most affordable market for first-time buyers to enter, Liverpool registered 5% rate of price growth which is the highest of all 20 UK cities analysed.
Zoopla focused on first-time buyer affordability since this group accounted for the largest number of home purchases in 2018 and remain a key driver of growth in housing sales. Richard Donnell, research and insight director at Zoopla said: “First-time buyers are an important group accounting for more than one in three sales.

Average Incomes Required

Lending for First Time Buyers on The Up

Although higher income requirements are making it challenging for first time buyers, the number of first-time buyer mortgage approvals are on the rise. Latest data from UK Finance states that there were 27,370 new first-time buyer mortgages completed in April 2019 which is 7.9% more than in the same month in 2018.