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 05 September 2008 09:39 BST

House prices for first-time buyers up '200 per cent'

Thursday, 17 Apr 2008 00:01
House prices for first-time buyers have doubled over the last ten years
House prices for first-time buyers have risen by 200 per cent over the last ten years, according to the annual Roof affordability index.

The index, published in a report by the charity Shelter today, shows the average first time property price has risen from £52,674 to £159,494 during the last decade.

The house price to income ratio has also apparently doubled from 1.72 to 3.4.

First-time buyers in London face an even worse situation with prices rising by 250 per cent to around £260,000.

The proportion of household income spent on mortgage repayments has also increased from £304.80 to £827.87, since 1997, a rise of 172 per cent.

Shelter says that as a national average, it is 78 per cent harder for first-time buyers to secure a property than it was ten years ago.

Shelter chief executive Adam Sampson said: "These new figures show in full the true and worsening situation first-time buyers find themselves in. Every year the gulf between what first-time buyers can afford and the cost of housing is widening.

"Despite falling house prices, many lenders are increasing their mortgage rates, making an already desperate situation worse. It means there is a generation of young people and young families being locked out of the housing market without a hope of ever sharing in the asset wealth of the generation before.

"Salaries throughout the UK may be rising, but ordinary people are still being priced out of the housing market. Buying a home has now become a distant, unaffordable dream for millions of first-time buyers, while thousands of others are facing repossession and homelessness."

The Liberal Democrats criticised the government for failing to support households struggling to pay their monthly mortgage repayments.

Liberal Democrat housing spokesman Lembit Opik said: "The government needs to explain how it will support the families who have stretched themselves to buy a home and are now faced with sky-high mortgage repayments and the threat of negative equity.

"Without support, tens of thousands of families face repossession this year. How much more evidence does the government need before they admit that there’s a problem? They are turning self-delusion into a science."End of story


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