First Time Buyers ‘Will Need A Salary Of £106k To Buy A House In London’
First time buyers in London will need a salary of £106,000 and a deposit of £138,000 to get a property in 2020, according to figures from homelessness charity, Shelter.
This is over a quarter on the £80,000 needed for a typical first time buyer’s mortgage today, as average house prices are projected to rise to £558,000 over the next four years.
The charity’s research shows over the last five years, the country’s severe housing shortage has seen house prices rise 15 times faster than wages in London, and it is urging the next mayor to commit to building truly affordable homes.
The research looked at the salary and deposit needed for the average first time buyer today, and calculated what these would be in 2020 if they grew in line with the 23% increase in house prices projected by Prof Paul Cheshire (pdf).
People living in Westminster, Lambeth, Newham and Greenwich face the greatest disparity between wage growth and house price increases, according to the research.
In Westminster, average full time wages fell 7% from 2010-2015, while the average property price rose 67%. In Lambeth, wages have fallen 1%, while the cost of an average property rose 74% to £600,496.
Campbell Robb, Shelter’s chief executive, said: “When house prices are increasing 15 times faster than the average wage, it’s no wonder Londoners on ordinary incomes are being locked out of a home of their own.
“With the situation only set to get worse, Generation Rent will be forced to resign themselves to a life in expensive, unstable private renting, and wave goodbye to their dreams of a home to put down roots in.
“It doesn’t have to be like this. The next Mayor of London has the power to turn our housing crisis around, and with only weeks before Londoners go to the polling booth, the candidates must commit to investing in homes that people on ordinary incomes can actually afford and making renting more secure.”