Planning to buy your own place in the big smoke after graduation? Or in a few years time after you secure that promotion? Well, unless that promotion will get you £77,000 a year, think again.
A recent study conducted by KPMG, shows first time buyers will need on average around £77,000 to get on the housing ladder in London – and that’s at the BOTTOM of the rung.
That’s almost double the UK average. First time buyers elsewhere need to be earning around £41,000 a year. The study highlights that affordable housing in the capital has become a dream for all but above-average earners, or those lucky enough to have come into a sizeable inheritance.
The contrast between average income and the cost of getting on the property ladder is certainly alarming – quite naturally people would rather buy than rent. Renting is ‘dead money’ and greatly reduces social mobility.
With the election only a few days away, the financial consultancy is calling for a long-term housing strategy to tackle the worsening housing crisis. The research warns of the dangers of not tackling the problem head on.
Since 2010, there has been a 64% increase in new mortgage lending that would be viewed as risky by the Bank of England – if this isn’t dealt with their could be another housing crisis right around the corner.