Couples must save £28,860 before planning to buy first home: RICS |
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Thu, 24 Aug 2006 10:55
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LONDON - Couples who are planning to buy their first home must save for 7.4 years to be able to meet the deposits for the home, according to the latest survey by the Royal Institution of Chartered Surveyors (RICS). The number of years that a couple with an average joint income must save has nearly tripled in the last decade, the survey found.
In order to afford the purchase costs of a new home, a couple must now save £28,860, or 74 per cent of the average combined income of £39,000. But a decade ago, a couple needed to save for just 2.5 years till they accumulated £6,525 or 25 percent of their joint pay of £26,100 in order to afford deposits as well as stamp duty. The new survey by RICS has found that the cost of buying a home and meeting mortgage repayments are currently at the highest level in over two decades.
“If the housing market is to become more accessible, lenders must continue to offer generous funding levels, and the Government should, out of necessity, promote a significant increase in the housing stock," said David Stubbs, RICS economist. "The financial pressures of up-front buying costs and rising energy prices will continue to create a "have - and have not" property society." Housing price growth has spiraled in the last year and while this is good news for the market, first-time buyers are almost shut out.
Accessibility is now worse since a shortage of properties means that prices have grown out of control. Over the last decade, the average age of a first time buyer has also risen from 28 to 31 years. “The Government must act to create more social housing and tackle the problem of nimbyism in the countryside by building affordable housing for key local workers," Stubbs said.
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House prices register biggest increase in two years: RICS 