New research from My Home Move Conveyancing, the UK’s largest conveyancing services firm, reveals that the cost of buying a first home today is 191% higher than it was for their parents in the 1990s, even after adjusting for inflation.
The average earnings to house price ratio has more than doubled from 4.0 in the 1990s to 8.1 today.
The average first-time buyer is now aged 33, the same age their parents were in 1995 when buying their first home. However, the property market affordability has significantly changed since then.
In the 1990s, the estimated average UK house price was £60,551, equivalent to £119,189 today after adjusting for inflation. The average annual salary was £15,034, or £29,593 today. This gave an affordability ratio of 4.0.
By contrast, in the 2020s, the average house price is £280,660, and the average annual salary is £34,637, resulting in an affordability ratio of 8.1.
Further analysis shows that in 1995, the average cost of a first home was £38,806, with a 15% deposit of £5,821.
Adjusted for inflation, this is equivalent to buying a house today for £76,833 with a deposit of £11,525.
However, today’s first-time buyers pay an average of £223,554, requiring a deposit of £33,533, meaning they are paying 191% more than their parents did.
Alistair Singer, director of My Home Move Conveyancing, said: “We often hear about how much more affordable the world was when our parents were younger and the cost of getting on the ladder is certainly one area where they were far better off than their children are today.
“Today’s first-time buyers are facing a significant struggle as house prices have boomed to record highs in recent years, while earnings have struggled to keep pace.
“Add to this the initial barrier of a higher mortgage deposit, the new norm of significantly higher mortgage rates and often tighter criteria from lenders and it’s a very tough time indeed when it comes to buying your first home.
“For many, it’s a task that’s only achievable with the help of the bank of Mum and Dad or loved ones and there’s certainly no shame in that given today’s first-time buyers are paying 191% more than their parents did.”
