First-time buyers are nearing a critical affordability threshold with new data suggesting that even dual-income households are struggling to get on the property ladder.
According to mortgage technology firm Twenty7tec more than half of all first-time buyers (59%) earn below £60,000, suggesting that the limits of affordability for average working households are being reached.
With the national average wage now standing at around £37,800, the company warns that home ownership is slipping further out of reach for many.
Even where couples combine their salaries, lending criteria are stretching buyers to their maximum capacity. A joint income of £60,000 typically supports a mortgage of around £270,000, requiring a deposit of about £30,000 to reach the UK’s average property price of £290,000.
POPULATION SHIFT
The situation is most acute in the South East, where average house prices exceed £440,000, effectively locking many would-be buyers out.
However, the firm notes that cities such as Leeds and Manchester are also seeing steep increases, driven by investment and population shifts away from London since the pandemic.
Nakita Moss, Head of Lender at Twenty7tec, says: “Increasingly, the answer is found not in higher earnings, but in outside help.
“Many first-time buyers are on modest incomes, even as they reach their late 30s, which leaves very little room for error when it comes to affordability.
“This has led to people having to wait longer to save a deposit, often skipping smaller flats and moving straight into family-sized homes as they juggle career progression with starting families.”
AFFORDABILITY CRISIS
Government support, including stamp duty relief for first-time buyers, has offered temporary relief but little to address the underlying affordability crisis. The reduction earlier this year in the nil-rate threshold—from £425,000 to £300,000—has added further pressure in higher-value markets.
Moss adds that the firm’s data shows a shift in how people buy: “We are already seeing a steady rise in group mortgages, with friends or family members buying together, as well as intergenerational households and co-ownership models.”
Around one in seven first-time buyers (15.4%) are now aged over 40, and the number of first-time buyers aged 51 and above has risen by 80% in the past five years.
“Longer-term lending is no longer a niche product but an essential tool,” she says. “If the two-salary ceiling becomes the new normal, it raises difficult questions about how future generations will be able to buy at all.”
