The average UK homebuyer currently requires almost 26 months of net earnings in order to cover the cost of a 20% mortgage deposit. This figure climbs to over 37 months in London.
The research from estate agent Barrows and Forrester compared net salaries and average mortgage deposits of 20% to work out how many months income is required to accumulate the average mortgage deposit.
In London people typically earn £2,800 after tax, but that amount is dwarfed by an average mortgage deposit (20%) of £105,600 – indicating how house prices are increasingly running away from salaries.
Other challenging regions include the South East, South West, and East of England.
In the South East take home pay of £2,400 per month would need to be saved for 32.3 months to afford a 20% deposit amount of £78,300.
South West buyers would need to save earnings of £2,100 for 31 months to afford a deposit of £64,200.
Finally in the East of England earnings of £2,300 would need to be saved for 30.4 months to afford a deposit of £70,200.
Even though earnings are so much lower in regions like the North East, Northern Ireland and Scotland, the survey shows house deposits can be saved for in roughly half the time as in London.
In the North East take home pay of £2,000 compares to a 20% deposit of £32,200.
It would take 16.3 months to save for a deposit so buying in that region is at least attainable for those that earn well. It’s a similar story in Northern Ireland and Scotland.
Barrows and Forrester managing director James Forrester comments: “The UK is facing an affordability crisis, and that’s underlined by the state of the housing market. Unlike generations gone by, even if you earn a competitive salary you’re facing an uphill task to afford a deposit.
He adds that having prices climb out of step with salaries threatens social cohesion and puts a gap on aspirations of the UK’s younger workforce.