The combination of high house prices, reduced mortgage options, and delays to the entire house buying process have created a housing market that has been tougher than ever on first-time buyers in particular. Having to save a bigger deposit for more expensive properties has hit hard the aspiring homeowners that were already saving in an environment where house price growth was outpacing salary growth.
Still, the situation is not as hopeless as it may seem, on one condition: a buyer's flexibility in choosing their location. According to brand-new research by estate agents Coulters Property (opens in new tab), some UK cities still offer a fairly decent house price to income ratio, which means that prospective buyers in these locations can hope to save up for a deposit within a reasonable amount of time.
And although the data takes a 10-per-cent deposit as a default (90-per-cent mortgages are difficult to come by at the moment), it still gives a good illustration of the very different experiences first-time buyers will have purely on the basis of where they are in the country.
The city where saving up for a deposit is quickest is Liverpool – the residents of this city can hope to have a 10-per-cent saved in just under five years on the local average salary of £23,314. Even with house prices rising rapidly in the North, it still offers far greater affordability to first-time buyers than the South. All the cities in the top 10 but one are located in northern England or Scotland and include Stoke-on-Trent, Bradford, Blackpool, Dundee, and Glasgow. Swansea is the only Welsh city in the top ten – saving up for a deposit there will take you on average seven years and three months.
It will come as no surprise to anyone that the grimmest statistics come form the opposite end of the country. Saving up for a deposit in London will take a first-time buyer on an average salary...24 years and 10 months. Now, that's a thought. Oxford and Cambridge are not far behind: you'd have to save for 20 and nearly 18 years respectively to get on the property ladder in these university towns. Cheltenham, Reading, Slough, Exeter, and Bristol will all require over 12 years of saving to buy a house on the average local salaries.
Appalled? So you should be – although this may be an incentive to rethink where you want to live longer-term. The real problem is that average UK salaries are similar across the country, unlike house prices. The average salary in Oxford is £25,886, only a few thousand more than in Liverpool, and yet the average house there costs over £500,000, in contrast with £109,520 in Liverpool. If your job is flexible and you want to become a home owner sooner rather than later, it really is a no-brainer.