First-time buyers are struggling to get on the property ladder in the North West due to an alarming gap between wages and house prices, according to a new report.
The average house price in the region is now seven times more than the average annual wage in the region, compared to just four times that amount fifteen years ago.
Research from homeless charity Shelter revealed that first-time buyers in the North West will have to shell out an extra third (£42,000) when purchasing their first property now than they would have if their wages had grown at the same rate.
Shelter’s chief executive Campbell Robb warned aspiring home owners of the significant challenge they face on an ordinary income, especially those without access help from the ‘bank of mum and dad’.
“When wages and house prices are so out of sync that first-time buyers are having to pay tens of thousands of pounds more for a foot on the ladder, it‘s a clear sign that our housing market is out of control,” he told MM.
“Millions of young people and families are facing a lifetime in expensive private renting, or stuck in their childhood bedrooms well into adulthood.”
The most impacted age-group when getting on the property ladder is undoubtedly the young, with only a third of 25-34 year olds currently homeowners.
Figures from the English Housing Survey show that when compared with the youth of the past, two thirds of all people aged 25-34 owned homes in 1991.
However age and income does not reveal the full picture, with many first-time buyers turning to the bank to borrow money.
For the previous three decades, first-time buyers borrowed around double their annual income to buy their first home.
The ratio of loan to income borrowing has risen substantially from 2.4 in 2001 to 3.1 in 2004, and has remained around three times the average income ever since.
Shelter warns that unless politicians get serious about building the affordable homes needed, an entire generation will be priced out of a home of their own.
Mr Robb added: “With the General Election around the corner and housing one of the biggest concerns for voters today, there’s no better time for politicians to show they’re serious about getting us out of this mess.
“Politicians of all parties need to stop announcing piecemeal schemes and commit to ending the housing shortage once and for all.”
“We need a big bold plan that will fix our broken house-building market for the long term, and finally put a stable home back within reach for generation rent.”
“Ultimately we need to build more homes. If nothing is done and house building stagnates, home ownership will remain nothing more than a dream for most, and a reality for only a lucky few.”
Image courtesy of taxrebate.org.uk, with thanks.