'Challenging time for first time buyers' as house prices up to 13 times salary
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First time buyers are finding it increasingly difficult to get a foot on the property ladder as house prices rise to more than 10 times the average salary in parts of Suffolk.
The latest housing affordability figures look at the average salary in area versus the average house price and show buyers in Babergh, where the average property cost is £302,000, can expect to shell out 10.5 times their salary.
Meanwhile, in Ipswich - the only place to fall below the national average - buyers face shelling out 7.2 times their salary for a home with the average house costing £208,000.
Four years ago, the respective rates were 11.3 for Babergh and 5.8 for Ipswich.
In north Essex, buyers in Uttlesford can expect to pay as much as 12.6 times the average salary for a home with the averahe house costing £418,000. While buyers in Tendring are paying 8.5 times their salary to get a property.
In 2016, the rates were 12.3 in Uttlesford and 7.8 in Tendring.
According to the Office for National Statistics, only Ipswich finished below the national average affordability ratio of 7.8 at the start of the year.
Across Suffolk, the average house price increased by 5.94% to £264,000.
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Commenting on the latest figures, Richard Norrington, chief executive of Ipswich Building Society, said: “With young people disproportionately affected by the pandemic financially, and with fewer high LTV (loan-to-value) mortgages in the market to choose from, it’s a challenging time for first time buyers.
"Whilst in England last year, full-time employees could typically expect to spend about 7.8 times their annual earnings on purchasing a home, for younger generations this number rises.
"The average age of a first time buyer in the UK in 2020 was 34, and when taking into consideration the average income for someone in their 30s, purchasing a house in mid-Suffolk with a 10% deposit, this would be more than 8.7 times their salary. For a person in their 20s, this figure rises to almost 10.9 times their annual wage.
“Those looking to get a foot on the property ladder would be well advised to remain realistic in their expectations of what their first home might look like – potentially considering buying a smaller property or one in a cheaper location, over holding out for their dream home on their first purchase.
“For those lucky enough to have family members eager to contribute to their pot, a gifted deposit could be an ideal way to supplement what the wannabe homeowner has already saved up.
“Working with a niche provider could also be beneficial for first time buyers, with lenders taking their individual circumstances into account, rather than relying on a computer algorithm to make lending decisions.”