UK house prices: Property market has ‘peaked’ – boom won’t continue in March
The people I’m really sorry for right now are first-time buyers. It has always been difficult for those trying to get a foot on the ladder. But right now it has to be one of the toughest environments ever for those looking to enter the market, perhaps the toughest time we’ve seen in a generation.
A single person with a salaried job will only be able to borrow four times his gross annual salary. Some lenders may offer more, but borrowers should think carefully before potentially borrowing too much. The average property value is £270,000 – more in London. Still, the average salary is £39,000. Four times that is just £156,000. Cheaper homes are of course available, but even so the average buyer will therefore require a substantial deposit and/or a very well paid job.
The solution, other than relying on Mom and Dad’s Bank, is to consider shopping at cheaper places and sharing an apartment while saving. My advice would be to try to invest your savings as well as possible for maximum return and take a Help2Buy ISA for free government money. Or aim to buy with a trusted partner and consider shared ownership.
If all else fails, invent a time machine and go back to March 2009, when prices were less than half their current level.