Source: FT Adviser —
Mortgage repayments now make up nearly 40 per cent of a first-time buyer’s net take-home pay, which high street bank Nationwide has said is “close to the levels seen in the run up to the financial crisis”.
Senior economist at the bank, Andrew Harvey, said today (January 13) the figure was “well above the long run average”, and is compounded by a market which still maintains high house prices relative to buyers’ earnings.
The barrier to homeownership has also grown due to higher mortgage interest rates, which reached their highest levels since 2010 last year – over four times higher than the rock bottom lows of 2021.
Brokers have said their clients are having to revise their price ranges, rely more heavily on help from family, and in some cases delay their plans to get onto the housing ladder after being “nearly there”.
Many are calling for more government support to ease the strain.
“This is desperately sad, but unsurprising,” said Scott Taylor-Barr, a financial adviser at Carl Summers Financial Services.
“Everything seems stacked against the first-time buyer now, especially as the Help To Buy equity loan scheme was closed too, with no replacement in sight.
“The reality is that we haven’t been building enough houses for years now, so the available stock is becoming unaffordable to many.”
Raising a deposit remains a major hurdle for prospective buyers, according to Nationwide’s affordability report published today (January 13).
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