Couples seeking to take their first step on the UK property ladder must first save three-quarters of their joint take-home pay, a survey reveals today that shows the cost of housing has rocketed to its highest point in more than two decades.
Compounding the financial headaches for first-time buyers, the Royal Institution of Chartered Surveyors expects house prices to rise 7 per cent this year - nearly twice as fast as its previous prediction.
In a new study, the estate agents' industry body calculated it would take a couple buying their first home nearly seven-and-a-half years to save up the £29,200 needed to cover the deposit and associated costs if they put aside 10 per cent of their income each year. This has ballooned since its low of two-and-a-half years in early 1996.
Rics warned the biggest issue facing first-time buyers was now their ability to raise a deposit rather than the cost of paying down their mortgage.
Rics is but the latest organisation to raise its house price forecast, which previously stood at 4 per cent for 2006. Halifax and Nationwide have said they see house prices rising 5 per cent this year, up from earlier forecasts of 3 per cent.
Rics said: "Stronger market conditions reflect buoyancy in the economy and the stimulus provided by the August 2005 rate cut." But it sees growth slowing to 3 per cent in 2007 on the back of an expected series of rate rises. "If we are right in expecting at least one if not two more interest rate rises of 25 basis points, we believe the housing market will slow markedly next year."Reuse content