First-time buyers need to earn £54K to live in a city
The average income required for a first-time buyer to get on the ladder in a city has hit £54,000, having grown 9% since 2016, according to Zoopla.
The property price portal said that this is over £4,500 more than the amount needed to buy your first home three years ago.
The average deposit needed for first time buyers to purchase in a UK city is now £38,418.
Despite the overall rise, it’s actually become more affordable for first-timers in the three most expensive UK Cities – London, Oxford and Cambridge.
Those buying their first home in London, for example, need an average income of £84,000, £3,250 less than the amount needed in 2016.
Cambridge and Oxford require the highest incomes of anywhere outside of London, however the income needed to purchase has fallen in the university cities by -5% and -3% respectively.
Aberdeen registered the largest percentage decrease in the income required to buy of all the UK Cities, following sharp price decreases in the city following the crash in oil prices since 2015.
Cheap as chips
The lowest income to buy a typical property is £26,137 in Liverpool, despite the city registering the highest house price growth of all 20 UK Cities.
Deposit levels have increased since the global financial crisis – the average first-time buyer deposit ranges from £119,000 in London to £18,449 in Liverpool.
Richard Donnell, director at Zoopla, said: “First time buyers are an important group accounting for more than one in three sales. 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 although the income to purchase still remains relatively high. While it is a factor behind weaker house price growth it supports underlying demand for rental homes.
“Affordability remains attractive in many regional cities where house prices have not registered the gains seen in south eastern England. Liverpool has the lowest income required to buy and has the highest rate of price growth at 5%. We expect prices to continue to increase in cities where housing is in reach of those on average incomes.”