A new study says that first time buyers in Lichfield will need to borrow almost four-and-a-half times their annual salary to get onto the property ladder.
The data from the Office for National Statistics and 2022 property valuations from Zoopla was analysed by Mojo Mortgages.
The research showed Lichfield was 37th on a national list of how many multiples of the average salary for a couple would be needed to buy a home in various towns and cities.
A spokesperson said:
“The research showed that residents earning an average of £34,286 in Lichfield need to borrow 4.28 times their salary to afford a property valued at £345,345 when buying as a couple.
“Of course, when buying alone this will be even higher.”
Mojo Mortgages spokesperson
The table was topped by Bath where a couple on average salaries would need to borrow 7.5 times their income and provide a 15% deposit on an average property price of more than £528,000.
The other end saw Hull named as the most affordable areas with 2.3 times the average salary required.
I think borrowing 4 times your salary to buy a home is pretty standard. Most lenders offer 5 times your salary. Lichfield isn’t an “unaffordable” as most people think and certainly more affordable than many other areas in England.
When I bought my house, I think the norm was around three times annual income. A debt crisis is looming once interest rates return to historical levels and currently overpriced houses plummet in value.
@Carl Sholl
Absolutely Carl. A re-adjustment of the market is long overdue, ala 2007. I hope these youngsters fully understood that interest rates will undoubtedly rise some time in the future.
Simon – the example is not one person borrowing 4.28 times their salary. It’s two people borrowing 4.28 times their salary. A salary of £34k each. Which is a lot more than a lot of people earn. 4.28*34286=£146k (rounded) which nowhere near enough to buy an apparently average priced £345K property. Double it to get £292k. Add 15% deposit and that’s how you reach £345k. Someone buying what is apparently an average priced house on their own earning £34k who had managed to save up over £50k for deposit would need to borrow 8.5 times their salary.
House prices are very very high in relation to salaries compared to 40 or 50 years ago. And they are still rising faster than salaries. People like Kirsty Allsopp like to say young people can afford to buy a house if they cut down in buying avocados and cheap package holidays but that simply isn’t the case. What’s the point in someone cutting back anything that could be deemed a luxury and managing to save £5k in a year when in that time the average house price rises by more than £5k?
Yes that’s obvious. You don’t split the household income, it is combined household income x4 (ish). That’s hardly unusual around the country (and much worse in the south). The council use excuses like this to build tiny 2 bed box houses everywhere so people can “afford” them, and they look awful in these high density developments with miniature gardens. Lichfield is no more expensive than any other decent area to live, (and actually cheaper than some areas, I.e. Sutton Coldfield, Solihull etc) stop pretending it is.
The average semi in Lichfield sells for £290k (cheaper in some areas) and the average terraced sells for £240k. A couple earning £30k each can afford an average property in Lichfield. If you don’t earn enough then don’t buy. Buying a home is a privilege not a right. In this country we’ve got into a mindset that everything is an entitlement, and the Government should step in, fix everything and pay for everyone. The left really are morons.
https://www.rightmove.co.uk/house-prices/lichfield.html?page=1
I’d like to live in a society where everyone had a decent, secure, warm home to live in (owned or rented). If that’s moronic to some people so be it.
Simon, this article is about is showing the data that Lichfield is less affordable than other places. The data is only pointing out the discrepancy, it isn’t pretending to be anything else. Agreed, small homes don’t really address the problem; this is a nationwide issue with house prices outpacing wages and becoming a larger pressure to the younger generation.
https://www.newstatesman.com/politics/2021/05/how-uk-house-prices-have-soared-ahead-average-wages
Steve, renting can be extortionate and take away a family’s ability to save for a deposit on a house. For those on lower wages this means in the long-run, they have little chance of buying a house. Their money lost to landlords. Those on higher wages, with financial support, or with inheritance, can pay for their own house and it becomes an investment.
Everyone, regardless of background, having access to affordable housing which doesn’t condemn them to further financial hardship or create a wider gulf in class, is not a privilege. People pointing out this social inequality is not an “entitlement”. I can see the appeal of grossly simplifying a situation in order to vilify someone else’s views, though.
Simon – nothing I wrote was pretending that Lichfield is no more expensive than any other decent area to live. My point was that houses are a lot more expensive than they used to be in relation to salary.
It is very ignorant to think that it’s OK for house prices to be considered as multiple of two people’s combined salary. Lots of single people want to buy a house. Some people find themselves single with children to look after. It used to be the norm for salary of a woman in a married couple to barely be considered by mortgage lenders. Borrowing 3x a single salary to buy a house was considered normal and realistic. A couple of minutes in Google finds UK median salary for 2021 to be £31k and a average UK house price in October £268k. This is abad situation. High house prices affect renters too because landlords have to charge more than in rent than the mortgage payments. The more unaffordable houses are to buy the more unaffordable they are to rent. The more someone pays in rent the less they can save to buy. Renters can lose their home pretty much at the whim of the landlord. Everyone should be able to have a stable secure place to live to raise children if they want to. To know that they won’t be forced to move house and maybe as a consequence their children change school, because of decisions made by the person who owns the place they live in. The higher house prices get as a multiple of the average salary the richer the rich get and the poorer the poor get.
Err, you’re all off topic, probably because you’re struggling with any sensible argument in response. How about let’s follow the argument rather than going off on your own little tangents shall we? Look at the title of the article. It talks about the scale of the challenge “in Lichfield”. It then points to where Lichfield sits in comparison to other areas. So I’m afraid Glenn you’re simply wrong. My point is that this isn’t a “Lichfield” issue, it’s a nationwide one. Lichfield isn’t more of a problem than anywhere else. I’m glad we agree that small homes don’t solve the problem. Tell that to LDC.
If you earn £15k a year, you can’t afford to buy a house. That’s the way the world has gone. Just like you can’t afford to buy a BMW. Obviously there are other options, renting, social housing, housing associations etc. My point is nobody is guaranteed to buy a home, just like some people can’t afford to run a car. These things aren’t givens, or guarantees, you have to strive for them and earn it. I agree that house prices can’t keep outstripping wage growth, and eventually it will level off. It has to otherwise nobody will be able to afford anything. I wasn’t talking about “access to affordable housing”, this is where people like you muddy the waters. I’m talking about purchasing a house. £240k is the average for a terraced house, hardly London prices is it? In Fradley it’s £220k. If people refused to pay it then they wouldn’t sell for it, would they?
George – everything is more expensive than it used to be – is that really your point?? I took issue with Lichfield being made out to be such an unaffordable place to live compared to other places, hence all these hundreds of 2 beds popping up everywhere. If you could follow what I’m saying before jumping on your bandwagon it might help.
Ann, you’re simply off topic so don’t worry about it.