Despite salaries being higher, analysis of Government statistics verifies theory that it’s harder to get on the property ladder now than 20 years ago.
It’s an age-old dispute: parents are eager for their grown-up children to get onto the property ladder and the twenty-something kids claim it’s not as easy as it was back in Mum and Dad’s heyday. But who is right?
To put an end to the debate once and for all, South Wales solicitors firm Howells has searched through house price history and income data from the Office for National Statistics to find out the truth.
The historic house price research found:
Properties are more expensive than ever – In 1980 the average home in the UK cost £24,000. By 1990, this had grown to £60,000, and ten years ago you could expect to pay just under £200,000.
As of June 2017, the average UK property costs £223,257.
House prices have risen well above inflation – In 1997, the average prospective homeowner could expect to pay up to 3.6 times their earnings on purchasing a home. Last year, the average person needed to pay around 7.6 times their earnings – more than double!
In this decade alone, residential property prices in England and Wales increased 259%, but median individual annual earnings grew just 68%.
First-time buyers are getting older – In the decade 2005/2006 to 2015/2016, the mean age of first time buyers rose from 31 to 32.
Looking even further back, in 1991, 67% of 25 to 34 year olds owned their own home, compared to just 36% in 2014. During the same period, the number of homeowners aged 16 to 24 dropped from 36% to 9%, and aged 35 to 44 fell from 78% to 59%.
Commenting on the results of this study and the effects it has had on the conveyancing industry, Tristan Lewis, Business Development Manager of Howells Solicitors said:
“With property prices considerably higher than twenty years ago, we have become familiar with the requirements of first time buyers for an affordable conveyancing service during these demanding times. However, the comparison of these values against income data has reiterated this further.
To combat these issues, Howells offers a fixed fee conveyancing service with no hidden extras and a no sale, no fee policy. We pride ourselves on making moving home as straight-forward as possible and look forward to helping even more people purchase their first home.”
Matt Stevens, Director of Mortgage Genie, shared his thoughts on Howells’ report. He advocates recent changes in the property finance industry and has added:
“Looking back to mortgages 20 years ago, it’s important to remember that August 1997 saw a Bank of England base rate of 7%. This saw an increase of 0.25% by November that year — an increase alone that is the equivalent of today’s base rate.
Since then, we’ve seen a continual expansion of the mortgage market, with more options and products for clients.
Over the last 20 years, we’ve also seen an increase in regulation, ensuring mortgages are much more carefully agreed. Plus, these days, clients have the opportunity to work with fully-qualified and regulated professionals, who are easily accessible and will always be willing to help. This is in stark contrast to the very limited options available to clients 20 years ago.”
Howells Solicitors offers expert legal advice in South Wales and beyond. With six offices across Wales, including its headquarters in Cardiff, Howells has the size, experience and knowledge of a large legal firm, with the personal service of a small organisation.
Find out more about Howells’ conveyancing services and get advice today by calling 0808 178 2773, or for further details on this press release view the full report here.
For more information on Howells Solicitors, or for further quotes, please contact Stephanie Lamerton at Steph@Libertymarketing.co.uk