A quarter of neighbourhoods in England and Wales were off-limits to many prospective home owners last year because average income in these areas was below the level needed to buy, new research suggests.
According to analysis of data from the Office of National Statistics (ONS), the cost of an entry level property on average across England and Wales has increased by almost 20% in the last decade to £140,000. For new properties, the price was nearly £180,000.
The data suggests, however, that home ownership prospects varied across the country.
Those in England who succeeded in making it onto the property ladder in 2016 paid on average more than £198,000 while would be home owners in London faced more of an uphill climb, with the average value paid by first time buyers over £423,000.
First time buyers entering the property market typically purchased homes for more than the average entry level house price where they live. This was the case in all English regions and in Wales, showing that those who did manage get onto the property ladder for the first time could actually afford more than the cost of an entry level property.
However, this doesn’t reflect those people who couldn’t afford to buy their first home. Assuming a 15% deposit, new buyers in London could require a household income of nearly £60,000 and savings of £55,000, challenging for many, according to the ONS analysis.
A typical household in England and Wales could need an income of £26,444 in order to borrow enough for an entry level property, however this figure varied greatly within regions.
Some of the least affordable areas were in London. In general these areas were estimated to have higher than average household income, but house prices were significantly higher than in other regions of England and Wales.
Source: www.propertywire.com
