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Home » News » Mortgages » First Time Buyers » Want to buy your first home in the south of England? It is now ‘impossible’

First-time buyers are now locked out of every region in the South unless they have extra help

Property in the south of England is now almost entirely shut off to first-time buyers who do not have extra support, thanks to the pandemic house price boom.

First-time buyers cannot get mortgages to cover the cost of purchasing an average priced home in the South West, South East, east of England and London if they have only a 10% deposit, according to analysis by data firm TwentyCi.

In the south of England, properties cost on average 5.78 times salaries, known as the loan-to-income ratio. Tighter mortgage rules that came in after the financial crisis mean few banks will loan worth more than 4.5 times a buyer’s salary.

This means that in areas where the loan-to-income ratio exceeds 4.5, it is effectively impossible for a first-time buyer to purchase without a deposit larger than 10%. In these places, entry-level purchasers either need massive savings, support from Government schemes or help from the so-called “Bank of Mum and Dad”.

TwentyCi measured the average price of an entry level property in each region against the median income. In inner London, a first-time buyer with a 10% deposit would need to borrow 7.7 times their salary to purchase a typical £350,000 property.

Even in the South West, where the average entry-level property is worth around half that at £165,000, a first-time buyer would need to borrow five times their salary.

By contrast, in the North East and Scotland, the most affordable locations, first-time buyers with a 10% deposit would only need to borrow 2.3 times their salaries.

Colin Bradshaw, of TwentyCi, said: “For people in the South of England it is now impossible without additional funds over and above an average mortgage and a 10% deposit.”

An acute shortage of supply in the wake of the pandemic has pushed prices further out of the range of affordability. Outside London, the whole of England and Wales has between 1.7 and 2 months’ worth of property supply left to sell. This is half the historic norm.

The number of new listings for sale was down 4.5% compared to 2019, while the numbers of agreed sales and exchanges were up 33% and 17.5% respectively.

The massive imbalance between demand and supply means that the average asking price in the UK halfway through 2021 was £391,000, up from £361,000 in the same period in 2019 – a jump of 8.3%.

The lack of homes for sale, combined with a slowdown in demand as the stamp duty holiday tapers will likely bring transactions back in line with pre-Covid levels, said TwentyCi.

[Source:, 15 July 2021]

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