South of England now unaffordable for first-time buyers

First-time buyers will not be able to buy a home in the South of England with only a 10% deposit, according to a report by data agency TwentyCi. The agency’s second-quarter Property & Homemovers Report shows that incomes are falling further behind values, putting mortgages beyond the reach of most first-time buyers. TwentyCi’s Colin Bradshaw said: “Getting on the property ladder has always been tricky. However, for people in the south of England it is now impossible without additional funds over and above an average mortgage and a 10% deposit.” The average loan-to-income value for properties in the South now stands at 5.78, rising to a staggering 7.7 in Inner London. Mortgage lenders are limited by the FCA on the number of mortgages they can issue at more than 4.5 LTI value. The North East of England and Scotland are currently the most affordable locations for first time buyers both with a LTI value of 2.3. The lack of affordability is further exacerbated by the acute lack of stock coming to the market. England and Wales at a regional level has less than two months of property stock left to sell. The South West has the lowest level of houses for sale, whilst Inner London currently has the most. The lack of stock is resulting in demand outstripping supply which is driving up house prices. The average asking price across the UK in Q2 2021 is now £391,000 compared to £361,000 in Q2 2019, an increase of 8.3%. Wales and the North West have experienced the highest year-on-year price rises at 22% and 20% respectively. While Scotland clocked a respectible 10%, London had the lowest growth at just 3%. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews