First-time buyers now need an average income of £54,000 to purchase a typical property in a UK city, but the priciest locations have become a little more affordable, according to the latest data.
This average income required has risen by 9% since 2016, when it was £49,900, largely down to higher house prices, said the property website Zoopla.
Earlier this week, official data showed average UK house prices increased by 1.4% in the year to April, down from a 1.6% rise in the 12 months to March, with property prices continuing to fall in London.
Zoopla looked at 20 cities that account for more than one-third of the UK’s housing stock and found Liverpool had the lowest gross household income required for first-time buyers at £26,000.
In London, meanwhile, those who have never owned before need an average household income of £84,000 to purchase a property. While this may seem unattainably high for many would-be purchasers, Zoopla said it was the lowest figure for four years and £3,250 less than the amount required in 2016.
“This follows three years of weak growth and small price falls in the capital, where prices are now beginning to stabilise,” said a spokesman.
The site put the current average price of a home in London at £482,000, compared with an average of £256,000 for the 20 cities analysed and £219,000 for the UK as a whole.
Cambridge and Oxford require the highest typical household incomes of anywhere outside the capital, at £72,000 and £69,000 respectively. However, these were down on £76,000 and £71,000 respectively three years ago. Zoopla recorded the average price in Cambridge as £422,000 and £407,000 in Oxford.
While Liverpool was named the most affordable market for first-time buyers, it was also the city with the highest house price growth, of 5% over the 12 months to May.
In contrast, prices in the capital fell by 0.4% over the same period and by more than 4% in Aberdeen, where the property market is heavily reliant on the North Sea oil and gas industry. Tumbling oil prices have had a big impact on the port city.
Richard Donnell, Zoopla’s research and insight director, said: “While the average household income to buy a typical home across UK cities has grown 9% since 2016, weaker price growth and recent price falls have led to a 5% reduction in the income to buy across the most expensive cities. It will come as a modest relief for would-be buyers, though the income to purchase still remains relatively high.”
The website makes a number of assumptions to calculate its figures – for example, Zoopla assumes 30% of net household income is spent on mortgage costs and that a deposit of 15% is put down (25% in London, Oxford and Cambridge).
Want to buy a home in the UK? You’ll need to earn £54,000 (on average) – The Guardian