The Halifax has claimed that 92% of houses in Britain's 548 postal towns are priced out of reach for first time buyers. The least affordable place in the UK is Gerrards Cross in Buckinghamshire, where the average property price is 18 times the average income of a first time buyer. Lochelly in Scotland is the most affordable town in Britain, with an average property only 3 times higher than a first time buyer's income. First time buyers accounted for only 30% of new mortgage agreements in 2004, compared to a 50% average of the previous few years.
Our view:
The long term effects are simple. The richer will become richer and poorer become poorer. In the longer term though, we believe this may cause a correction in the property market and we suffer a mini property recession.