Can you afford your first home? Many who rent can't!

a recent article in the Echo has highlighted an issue many first time buyers are facing. If you're one of the few people who earn an above average salary it probably doesn't apply to you, however, that isn't many people. The majority of us are all in the same boat. To read further details of the article click below!

Desperate first time buyers in Liverpool face paying more than five times the average income to own a home.

Those on an average salary of £23,582 could put their entire year’s pay towards a new home and still not have enough for a mortgage.

Figures illustrating just how hard it is for Merseysiders to get a foot on the property ladder are revealed in a report out this week into the region’s housing crisis.

The document, titled Homes for Merseyside and Cheshire, said: “Average salaries in our area fall way short of average house prices. Private rent is unaffordable for many. Unemployment is much higher than the English average.”

To get a mortgage to buy the average house in Liverpool you’d need a salary of £28,997, meaning those on the average salary of £23,582 are being priced out.

Meanwhile a massive 12% of people in the city are unemployed and therefore a long way off having enough income to buy their own home.

Katie Teasdale, North West external affairs manager at the National Housing Federation, which represents housing associations, said: “We can see evidence of the housing crisis all over the country, and unfortunately Merseyside is no exception.

“In some places spiralling costs have put homes out of reach of many workers and families, while in other places we see communities that are struggling, in desperate need of jobs and regeneration.”

This week’s report shows in Sefton the ratio of house prices to income is 7, in Wirral it is 6.4 and in Knowsley 5.4.

In Sefton the income required for a mortgage on an average house is £36,666 yet the average salary is just £23,005.

The salary needed for a mortgage is worked out based on an assumption of the mortgage criteria for a first time buyer.

Typically, this requires a first time buyer to have a deposit of around 20% of the total value of the home. This means they need to borrow 80% of the value of the home as part of their mortgage. Secondly, to work out how much they are able to borrow, the bank calculates this as 3 to 4 times gross salary.

As the ECHO reported earlier this week the bosses of 14 Merseyside housing associations are calling on politicians to help tackle the region’s housing crisis.

The landlords say there is a desperate need in the region for more homes to be built and for empty properties to be brought back into use.

They are calling on politicians vying to become Merseyside’s next MPs to help, asking them to:

- Meet them to discuss how they can work together to tackle the housing crisis

- Urge the next government to detail, within a year of taking office, how it will address the problems

- Raise issues highlighted in the report across Merseyside and Cheshire so that they are on the agenda of policy-makers

To try to find a way around the issue some people have found the only answer to be moving back home with parents in order to save enough deposit, here is Rob Ferguson's story - 

When Rob Ferguson moved out of his family’s Liverpool home at 23-years-old, he thought he was set for a life of independence.

But five years later, Rob, 28, has returned so he can save for a deposit to buy his own place.

He said: “I found it difficult in private rented accommodation. It’s expensive and you’re basically paying off somebody’s mortgage.

“My brothers are nine and 10 years older than me. One brother has been working longer than me and he’s only just managed to get his own place.

“My parents understand how difficult it is and have offered to help me with the deposit. But it’s a shame. I’d prefer to do it on my own.”

Rob works in administration at Liverpool Housing Trust (LHT), having initially joined through LHT’s apprenticeship programme.

It was a welcome break for Rob, who had been unemployed for six months.

He said: “I’m in an entry-level position and paid more than the living wage.

“A mortgage should be available to somebody like me, but it’s not achievable because of house prices.

“I’ve taken this step because of the housing market. Going back to mum and dad’s is the quickest way for me to save the money I’ll need.”

 

The housing crisis, whether that be first time buyers or renting issues, is real and isn't going to improve without getting the new government behind it. Join us to get your voice heard.

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