First-Time Buyers Now Need An Average Income Of £54,000 To Purchase In Major Cities

The average income needed has risen by £4,500 in three years.

First-time buyers hoping to get a foot on the property ladder will need an average household income of £54,000 if they want to live in one of the UK’s biggest cities, a new report has found.

Zoopla analysed house prices in 20 major cities across the UK, and found the average income needed to buy a home varied from £26,100 in Liverpool to a whopping £84,000 in London.

Across the cities looked at, the average income needed has increased by more than £4,500 over the past three years, Zoopla said.

Although it’s not all bad news: there was slight relief for those trying to buy in London – the average household income needed is £3,250 less than in 2016, following three years of weak growth and housing price falls in the capital.

Outside the capital, residents of university towns Cambridge and Oxford require the highest first-time buyer incomes. But as in London, these have fallen over the past three years. Aberdeen homebuyers have also seen a decrease in the average income they’ll need to get on the property ladder.

Leicester has seen the largest percentage increase in the income required to purchase since 2016, at 20%, followed closely by Birmingham and Manchester, reflecting house price growth in these cities.

The researchers said they made several assumptions for the study, including that 30% of a household’s take-home income is spent on mortgage costs and that buyers borrow no more than four times their income.

The analysis was based on buyers putting down a 15% deposit, increasing to 25% in the more expensive cities of London, Oxford and Cambridge. And average mortgage rates were used to calculate repayments over a 30-year term.

Richard Donnell, research and insight director at Zoopla said: “While the average household income to buy a typical home across UK cities has grown 9% since 2016, weaker price growth and recent price falls have led to a 5% reduction in the income to buy across the most expensive cities.

“It will come as a modest relief for would-be buyers although the income to purchase still remains relatively high.”

The average incomes needed to buy a home in 2016, followed by the figure for 2019 (and the percentage change):

- Liverpool, £23,000, £26,100, 14%

- Glasgow, £23,300, £26,600, 14%

- Newcastle, £25,500, £27,200, 7%

- Belfast, £25,500, £28,800, 13%

- Sheffield, £25,800, £29,500, 14%

- Nottingham, £27,800, £32,900, 18%

- Aberdeen, £38,300, £33,700, -12%

- Birmingham, £29,600, £35,200, 19%

- Leeds, £31,300, £35,500, 13%

- Manchester, £30,400, £36,200, 19%

- Leicester, £31,700, £38,000, 20%

- Cardiff, £39,000, £44,600, 14%

- Southampton, £44,100, £48,500, 10%

- Edinburgh, £41,800, £48,700, 17%

- Portsmouth, £45,300, £50,700, 12%

- Bristol, £53,100, £59,500, 12%

- Bournemouth, £55,000, £62,300, 13%

- Oxford, £70,800, £68,800, -3%

- Cambridge, £76,000, £72,000, -5%

- London, £87,300, £84,000, -4%