40 the new 30 when it comes to homebuying affordability
40 is the new 30 when it comes to homebuying affordability
The latest research by property purchasing specialist, House Buyer Bureau, has revealed that when it comes to climbing the housing ladder, it’s our 40s that present the greatest degree of housing affordability compared to any other life stage.
House Buyer Bureau analysed the average earnings, average house price and income to house price ratio of buyers at various stages of the life cycle, to reveal at which point in our lives, the high cost of homeownership is easiest to overcome.
The research shows that those just starting out in life predictably have no hope. With the average 18-21 year old earning just £13,237 per year, they would need 21.5 times their annual income to cover the current average UK house price of £285,009.
This falls to 10.6 years for 22-29 year olds who earn an average of £26,800 per year, a step in the right direction but far from affordable.
With an average annual income of £34,226, 30-39 year olds have a far better chance of making it onto the ladder, with the income to house price ratio for this stage of life sitting at 8.3.
No surprise then that the average first-time buyer age is now 37 given this increased affordability, although with house prices remaining high, it’s pushing closer to 40 and for good reason, according to House Buyer Bureau’s research.
Those aged 40-49 earn an average annual income of £38,574 meaning that they need just 7.4 times income to cover the current average UK house price, the lowest income to house price ratio of all life stages analysed by House Buyer Bureau.
Beyond this it increases once again to 7.9 for 50-59 year olds and back to 10.5 for those 60 years or above.
Managing Director of House Buyer Bureau, Chris Hodgkinson, commented:
“40 could well be the new 30 when it comes to the decade that many homebuyers finally make it onto the ladder, as house prices show now signs of falling by any significant margin any time soon, not to mention the fact that the cost of borrowing continues to climb.
However, this might not be the worst thing as our research shows that your ability to climb the ladder is significantly improved during this stage of life. For those looking to buy it also means that they may well be able to borrow the sum required for their dream home, rather than making do with a second best home they can afford at a younger age.
What’s more, the cost of borrowing is generally lower between the ages of 30 and 50 and so repaying your mortgage each month is also likely to be the most manageable it will ever be.”
