According to the Office of National Statistics, only one third of the population earns enough to purchase an average first time buyer home. The ONS claims that £30,000 is the amount of earnings needed to purchase an average first home at the moment.
Breaking down the figures further, apparently, 58% of men and 76% of women earn under £30,000.
Our View
According to Halifax's House Price Index, the average first time buyer property is selling for around £100,000 although it does depend where in the UK you intend to buy.
The average salary earned in the UK is under £22,000 and if sensible income multiples are used to obtain a mortgage of say 3 times first income plus 1 times second income, this only equates to £88,000. This is why first time buyers are finding it hard to get onto the property ladder.
Our recommendation to all first time buyers is not to overstretch yourself. Do not be tempted into the 5 or 6 times income multiple in order to obtain a mortgage. If interest rates rise, you could find yourself lumbered with huge mortgage payments and no social life.
Visit our site Mortgage Crazy.com.