First time buyers need to earn average of £54,000 to buy in major UK cities
27 June 2019, 12:12 | Updated: 27 June 2019, 12:13
First-time buyers hoping to get on the property ladder in the UK's major cities need an average income of £54,400.
Property website Zoopla, which analysed house prices in the UK's 20 biggest cities, said the average annual income needed ranges from £27,200 in Newcastle upon Tyne to £84,000 in London.
Across the cities looked at, the average income needed has increased by more than £4,500 over the past three years.
The research made several assumptions, including that 30 per cent of a household's take-home income is spent on mortgage costs, and that buyers borrow no more than four times their income.
The analysis expected that buyers would have a 15 per cent deposit to put down, increasing to 25 per cent in the more expensive cities of London, Oxford and Cambridge.
Average mortgage rates were used to calculate repayments over a 30-year term.
Outside London, Cambridge and Oxford require the highest first-time buyer incomes, although like London these have also fallen over the past three years.
Aberdeen has also seen a big decrease in the average income needed to get on the property ladder, Zoopla said.
Leicester has seen the largest percentage increase in the income required to purchase since 2016, at 20 per cent, followed closely by Birmingham and Manchester, reflecting house price growth in these cities.
Richard Donnell, research and insight director at Zoopla, said: "First-time buyers are an important group accounting for more than one in three sales.
"While the average household income to buy a typical home across UK cities has grown 9% since 2016, weaker price growth and recent price falls have led to a 5% reduction in the income to buy across the most expensive cities.
"It will come as a modest relief for would-be buyers although the income to purchase still remains relatively high."