Getting onto the property ladder has always been a hot topic among twenty-somethings and their parents – especially after the recent Budget. Grown-up kids want to move out, but can’t afford to, whereas parents who want the best for their kids can’t understand why not.
Well, Howells Solicitors is ending the affordability debate with its report: ‘Historic House Prices: Research Shows Your Parents Definitely Had it Easier’.
The South Wales-based business has examined government data to reveal a true comparison of the property market today compared to a generation ago.
Properties Are More Expensive Than Ever…
Back in 1980, the average UK home cost just £24,000. This rose to £60,000 in 1990, and ten years ago you could expect to pay £200,000. At the end of 2017, the average home now costs more than £226,000.
On average property prices have increased 7% each year since 1980.
…Homes Are Also Less Affordable
Property prices are higher, but wages are also, so does that mean getting on the property ladder is just as affordable as 20 years ago? Sadly, no.
According to the Office for National Statistics and the Annual Survey of Hours and Earnings (ASHE), the average prospective homeowner could expect to pay 3.6 times their earnings on purchasing a home in 1997. Last year, the average person required 7.6 times their earnings – more than double.
How is This Affecting First Time Buyers?
Somewhat unsurprisingly, the number of property loans taken out by first time buyers has decreased by almost half since the highs of the 80s and 90s, whereas the average homeowner is now older than ever before at 32 years old.
So, yes, your parents most likely had it easier in their day, but that doesn’t mean getting on the property ladder in the 21st century is a lost cause. If you dream of purchasing your own home, there are a number of government schemes and initiatives available, such as Help to Buy, you could also speak to your local conveyancing solicitors about a fixed-fee, no-sale-no-fee service.