The £1,000,000 First-Time Buyer Home 17 years until this becomes a harsh reality
11 August 2007: Being forced to paying £1 million for your first home could be just 17 years away according to the latest data from Stroud & Swindon, the UK’s 15th largest building society. This shocking research reveals that if house prices continue to follow the current growth trend*, first-time buyers would find their first home hitting the 1 million pound mark in 2024.
The £1 million starter home is likely to hit first-time buyers in areas of the country which boast particularly strong house prices far sooner if house prices continued to increase at the current rate: Greater London (11 years), the South East (15 years) and the South West (16 years). However, the year in which these regions reach £1million has not changed in the last 12 months – as house prices growth stabilises.
Table 1: Years to £1million FTB home, year on year comparison
| Region |
2007
Year average first time buyer house costs £1,000,000* (number of years) |
2006
Year average first time buyer house costs £1,000,000 |
Change |
|
|
|
|
| Greater London |
2018 (11 Years) |
2018 |
None |
| Northern Ireland |
2018 (11 Years) |
2025 |
- 7 Years |
| South East |
2022 (15 Years) |
2022 |
None |
| South West |
2023 (16 Years) |
2023 |
None |
| East Anglia |
2024 (17 Years) |
2024 |
None |
| North East |
2026 (19 Years) |
2030 |
- 4 Years |
| East Midlands |
2026 (19 Years) |
2027 |
- 1 Years |
| Wales |
2026 (19 Years) |
2029 |
- 3 Years |
| Yorkshire & Humberside |
2027 (20 Years) |
2030 |
- 3 Years |
| West Midlands |
2027 (20 Years) |
2027 |
None |
| North West |
2028 (21 Years) |
2029 |
- 1 Years |
| Scotland |
2031 (24 Years) |
2035 |
- 4 Years |
| United Kingdom |
2024 (17 Years) |
2024 |
None |
The biggest change since last year is in Northern Ireland. In 2006 it was estimated that a Northern Irish first time buyer property would cost £1million in 2025, however due to rapid house price growth over the past 12 months, this is now predicted to occur in 2018 – 7 years sooner and on a par with London.
Other regions where high house price growth has led to predictions coming forward are Scotland (-4 years), North East (-4 years), Wales (-3 years) and Yorkshire and Humberside (-3 years).
The £1 million starter home could require a worrying seven times the average first time buyer income (2024 - £136,074) and result in many consumers either not purchasing a home or putting off other life goals such as marriage or children to get on the property ladder. This development would also put pressure on lenders as they struggled to provide financing in a responsible and sustainable manner.
Table 2: Income required to afford £1 million home
| Region |
Year average first time buyer home reaches £1,000,000* |
Average income in year first time buyer home reaches £1,000,000 |
Average income multiple necessary to purchase the £1,000,000 first time buyer home* |
|
|
|
|
| Greater London |
2018 |
£63,513 |
16 x income |
| Northern Ireland |
2026 |
£103,532 |
11 x income |
| South East |
2026 |
£103,637 |
11 x income |
| South West |
2027 |
£110,003 |
9 x income |
| East Anglia |
2026 |
£119,933 |
9 x income |
| North East |
2027 |
£121,998 |
9 x income |
| East Midlands |
2031 |
£116,347 |
9 x income |
| Wales |
2028 |
£131,611 |
8 x income |
| Yorkshire & Humberside |
2024 |
£128,941 |
8 x income |
| West Midlands |
2023 |
£133,319 |
8 x income |
| North West |
2022 |
£134,617 |
8 x income |
| Scotland |
2018 |
£174,803 |
6 x income |
| United Kingdom |
2024 |
£136,074 |
7 x income |
Paul Chafer, Sales Director from Stroud & Swindon Building Society comments:
“This forecast paints a worrying picture for the future of the housing market. The data shows that getting onto the first rung of the property ladder is set to get even harder in coming years. Most people assume they will own their own home at some point in the future, however the results of our research shows that our children are going to find it very difficult to afford it.
“Even with house price increases set to slow down to more acceptable levels, we believe that in future first-time buyers are going to be forced to put off purchasing their first home for even longer. Therefore, it is vitally important for both potential first time buyers and their parents to start putting money aside for a house deposit as soon as possible.
“Mortgage providers also need to consider their lending criteria and actively work to develop products that help first-time buyers to get onto the property ladder in a responsible and sustainable manner. It is pointless simply increasing income multiples if this is going to result in consumers taking on levels of debt they cannot service.
“First-time buyers are the life blood of the housing market and we hope that this shocking picture of the potential future will force all those concerned to work towards averting this crisis!”
David Greenleaf Corporate Communications Manager
Stroud & Swindon
01453 768244
Notes for Editors:
- The average first-time buyer house price growth was determined using Data from Q2 1997 to Q2 2007 (Halifax House Price Index).
- The average first-time buyer income growth rate was determined using data from 1997 to 2007 (Office of National Statistics).
- The income multiples were then determined using the average first time buyer incomes.
About Stroud & Swindon Building Society:
Stroud & Swindon is the 15th largest building society in the UK with assets in excess of £2.8 billion. The Society operates through a dedicated team of intermediary business development managers, with a branch network of 22 offices and 20 agencies in the South West, complemented by a direct call centre based in Stroud and website
www.stroudandswindon.co.uk.