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Policy & Activities

18 November, 2011

Broken Ladder: 4.5 years without food and clothing – then you can afford a deposit

New research out today reveals that the average first time buyer (FTB) would have to save every single penny of their remaining earnings after they’ve paid their rent for four and a half years to have a chance of getting a foot on the housing ladder. In London it would take nearly a decade.

Saving a more realistic 50% of discretionary earnings, allowing people to eat and clothe themselves, would take on average across England nine years, or in London nigh on 20 years.

The Home Builders Federation has today released a report, Broken Ladder 2,  identifying the increasing lack of accessibility to the housing market at a time when supply is critically low – last year saw the lowest number of homes built since 1923 – with mortgage availability remaining the biggest constraint.

HBF is urging Government to act. It is calling for the introduction of a Government supported Mortgage Indemnity Insurance scheme, to help incentivise lenders to lend at higher LTV rates that potential FTB’s could afford

The shocking figures reveal that on average a FTB in their twenties has £556 a month left after paying their rent, utility bills and council tax (see page 7). The average starter home in England costs £156k, requiring a deposit of around £31K, 469% of annual remaining income and necessitating a FTB to save every penny for 4.6 years.

In London, the higher salaries earned by young people are negated by higher rent costs and house prices, resulting in a deposit requirement 992% of remaining annual income or a young person saving every remaining penny for 10 years without any spend on food, clothes or travel – clearly an impossible ask.

Because of this, the average age of the unassisted FTB has rocketed, with even those on higher wages in their thirties struggling to buy. It has resulted in more and more people being forced to stay with their parents with nearly a third of men and a fifth of women aged 20-34 now still living at home. It has also seen young people delay getting married, starting a family or taking out a pension.

Stewart Baseley, HBF Executive Chairman, said today:

“This report reveals the extent of our housing crisis; first-time buyers - the life-blood of the housing market – are unable to access the property ladder in the way a healthy society requires and expects. The lack of mortgage availability and the huge deposit gap are stifling a market already starved of supply.  We desperately need to return to realistic deposit requirements and a properly functioning and sustainable mortgage market.

“At the same time, the Government must ensure that the new planning policy they are relying on to increase house-building is truly pro sustainable development and is put in place as soon as possible. Without more homes and more mortgages, young families will lack the security of a roof over their heads and the housing crisis will risk reaching the point of no return.”

For media enquiries, or to arrange an interview, please contact Steve Turner on 020 7960 1606 / 07919 307 760 or steve.turner@hbf.co.uk 

Follow us on Twitter! www.twitter.com/homebuildersfed 
Notes to Editors:

1. The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s 300 member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uk 

 

Age 22-29

 

Region

Discretionary income after bills  p.c.m. (£)

Average house price (£)

Deposit at 20% (£)

No of months saving 100% of monthly  discretionary income

No of months saving 50% discretionary net income

England

556.07

156,463

31,293

56

113

NE

571.59

99664

19,933

35

70

NW

571.69

110,910

22,182

39

78

Y&TH

617.09

108,779

21,756

35

71

WM

555.39

120,120

24,024

43

87

EM

604.46

113,467

22,693

38

75

E

540.25

159,809

31,962

59

118

SE

531.36

178,294

35,659

67

134

SW

512.87

149,257

29,851

58

116

London

438.43

261,039

52,208

119

238

 

 

Age 30-39

 

Region

Discretionary income after bills  p.c.m. (£)

Average house price (£)

Deposit at 20% (£)

No of months saving 100% of monthly  discretionary income

No of months saving 50% discretionary net income

England

877.25

156,463

31,293

36

71

NE

808.8

99664

19,933

25

49

NW

857.81

110,910

22,182

26

52

Y&TH

886.42

108,779

21,756

25

49

WM

838.27

120,120

24,024

29

57

EM

856.99

113,467

22,693

26

53

E

811.63

159,809

31,962

39

79

SE

887.61

178,294

35,659

40

80

SW

751.85

149,257

29,851

40

79

London

946.73

261,039

52,208

55

110

Broken ladder 2 - November 2011 FINAL
(Size: 1.2 M, Type: pdf, last modified: 07.03.17)

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