That old chesnut of the FTB house

Graham_Devon

Seems I have just come across some statistics of how much the actual FTB house costs...

The average house price in the UK in July 2009 for first time buyers now stands at £143,454 which is an annual decrease of – 9.1%.

So it seems that the average FTB home (not the average home) stands at £143,454. This is from the Credit Action statistics. What is interesting is as below, the CML estimate that currently 80% of FTB's need parental help. 80%!!!!

Some other stats....

The Council of Mortgage Lenders (CML) estimate that around 80% of first-time buyers aged under 30 are likely to be receiving help from parents as they are unlikely to have been able to build up the deposits needed to enter the market from their own resources.

The typical first-time buyer deposit in July was 25% (£37,580). The average first-time buyer borrowed 3.02 times their income and the average first-time buyer loan was £112,745.

So, looks like the typical FTB's are earning 37k a year. Whether that be as a couple or singually. Which seems to me to be very realistic. 2 average jobs.

boyse7en

A mortgage 3.02x earnings sounds OK, and the ratio could even go a bit higher if the mortgage companies would accept less than 25% deposit. (A 10% deposit would give a ratio of 3.48%).
I'm not really suprised that FTBs get help from parents. We did, 15 or so years ago, and I would help my daughters if I could, whether they really needed it or not. It depends whether, on average, parents are paying a large proportion of the deposit, or just a couple of thousand to top it up.

phil_b_2

Re: the point about FTB's needing parental help (and getting it), is that really so wrong?

You have kids, go through your life getting older, you build up your wealth then pass some of it on to your kids when they need it. they then do the same thing and so do their kids. the cycle goes on. Seems a perfectly reasonable thing to me. What would happen to that wealth otherwise?

chucky

Graham_Devon wrote: »

Seems I have just come across some statistics of how much the actual FTB house costs...

The average house price in the UK in July 2009 for first time buyers now stands at £143,454 which is an annual decrease of – 9.1%.

So it seems that the average FTB home (not the average home) stands at £143,454. This is from the Credit Action statistics. What is interesting is as below, the CML estimate that currently 80% of FTB's need parental help. 80%!!!!.

i'd never had thought it was that high.

Graham_Devon wrote: »

Some other stats....

The Council of Mortgage Lenders (CML) estimate that around 80% of first-time buyers aged under 30 are likely to be receiving help from parents as they are unlikely to have been able to build up the deposits needed to enter the market from their own resources.

The typical first-time buyer deposit in July was 25% (£37,580). The average first-time buyer borrowed 3.02 times their income and the average first-time buyer loan was £112,745.

So, looks like the typical FTB's are earning 37k a year. Whether that be as a couple or singually. Which seems to me to be very realistic. 2 average jobs.

this has been said on many occasions here that it is approx £38k - to be fair i'd assumed that it was the average homehould income which if it is the case means that the average buyers income will be higher.

have you got the link to look at because it may be just one months data - July

Graham_Devon

chucky wrote: »

this has been said on many occasions here that it is approx £38k - to be fair i'd assumed that it was the average homehould income which if it is the case means that the average buyers income will be higher.

have you got the link to look at because it may be just one months data - July

I think the 37k salary would be joint. Of course, there may be some doing it on a single wage, but most will be joint FTB's. Just a personal assumption here of course though.

So could be made up of say 1x 20k job and 1x 17k job, which is far more realistic outside of London.

It's all here: http://www.creditaction.org.uk/debt-statistics.html

You click the month, then the blue headings at the bottom hold various other bits of data.

What does strike me as interesting is this, from July 2006...

Housing 1st Time Buyers: The average house price in the UK in May 2006 for first time buyers now stands at £147,868 which is an annual increase of 5.9%.

It's hardly changed.

Mr_Matey

How comparable are FTB "average homes" over time?
As average FTB age grows (now early 30s), so does the need for a bigger place. A 32 year old couple isn't going to buy a studio in the city if they're planning kids.

Personally I could've been a FTB anytime over the past 5 years. If I'd bought when it was first "affordable" for me, it would've been a 1 bedroom apartment.

But I decided to wait. Mostly because I wanted to travel and work in the UK, an opportunity that may not have been available 10-20 years ago.

If I'd bought on arriving in the UK, it probably would have been a 1 or 2 bedroom apartment. But I've decided to wait due to prices and because I'm not sure how long I'll stay.

If I was to buy back in Sydney in a year or two, my FTB property could be as large as a 4 bedroom house, as I'll be thinking family etc.

I know I'm not the only FTB who's decided to wait for economic / personal reasons but I wonder how many FTBs are actually jumping the "first rung of the ladder". I'd wager it's increasing along with FTBer average age.

Graham_Devon wrote: »

What does strike me as interesting is this, from July 2006...

Housing 1st Time Buyers: The average house price in the UK in May 2006 for first time buyers now stands at £147,868 which is an annual increase of 5.9%.

Rung jumping perhaps?

JonnyBravo

Graham_Devon wrote: »

I think the 37k salary would be joint. Of course, there may be some doing it on a single wage, but most will be joint FTB's. Just a personal assumption here of course though.

You may be right in that many couples are in the stats but of course there will be lots of singles too. Indeed if the majority were couples..... lets say 60% then 40% would be singles..... obviously, I hear you say, but follow it through....
If that were the case (admittedly that 60/40 split is off the top of my head, just as your supposition that most are couples is off the top of your head) then the average wage comes out at £23,125.
(A long way from the straight average you seem to be implying of £37k/2 = £18.5k)

That's the thing with averages Graham, just cos lots of people might earn £18k in your experience, or just cos a majority might be couples, the average can be very different.
You know the obvious one of the average numbers of arms for the people of the UK is less than 2 etc.

Interesting things averages.

Well, ok mildly interesting..... sort of.....



p.s. Yes, I know I've used "average" and meant "mean" all the way through

PasturesNew

£37k for a single person is hard to earn though

Graham_Devon

JonnyBravo wrote: »

You may be right in that many couples are in the stats but of course there will be lots of singles too. Indeed if the majority were couples..... lets say 60% then 40% would be singles..... obviously, I hear you say, but follow it through....
If that were the case (admittedly that 60/40 split is off the top of my head, just as your supposition that most are couples is off the top of your head) then the average wage comes out at £23,125.
(A long way from the straight average you seem to be implying of £37k/2 = £18.5k)

I'm not sure I implied that, merely just used two numbers out of my head as an example of how one single couple could be bringing in 37k between them.

Could be 27k and 10k for all I know, 29k / 8k.... 33k / 4k. Doesn't mean I'm implying anything

Just said it's more realistic outside of london that people would be earning those sorts of wages to make up an income between them of 37k.

Think there may be some slight over analysing going on here

JonnyBravo

Graham_Devon wrote: »

I'm not sure I implied that, merely just used two numbers out of my head as an example of how one single couple could be bringing in 37k between them.

Could be 27k and 10k for all I know, 29k / 8k.... 33k / 4k. Doesn't mean I'm implying anything

Just said it's more realistic outside of london that people would be earning those sorts of wages to make up an income between them of 37k.

Think there may be some slight over analysing going on here

My point isn't about the split of the numbers you've used to make up the £37k Graham.... blimey that makes no difference to the maths at all...... you can use £36,999 and £1 for all I care.....
IT COMES OUT THE SAME.


<sigh>



My point is about the split of couples/singles. Even with the majority being couples the singles do bring the average wage up a long way.

:rolleyes:

I guess I should've known better than hope you'd grasped averages yet.

Really2

But perhaps we can conclude that the bears have now given up on 3.5X the average single wage (around £25k) as a basis of house prices.