This is not far off the record of 48% that was reached in the first quarter of 1991. And according to figures from the Royal Institute of Chartered Surveyors (RICS), if you are a first-time buyer couple you need to save up an average of £25,600 just to cover the costs of a deposit, stamp duty and legal fees.
Put simply, if you are a couple both on low-quartile incomes, (earning £25,899 between you) this amounts to 96% of your joint annul income or just £299 less than your joint annual pay.
In the South-East and the South West regions, you need to save 100% of your annual income in order to meet the costs of the average deposit on a house. In London, where homes are least affordable, the figure stands at 112.1% of joint take-home pay. Affordability is better in some areas of the country, with upfront buying costs accounting for 72.9% of joint take-home pay in the North West, Humber and Yorkshire, but in other areas poorer couples need more than a year's pay to get on the housing ladder.
These figures are a big increase from the most accessible period of the housing market which was way back in 1996. Then, as a couple you only needed to save 21% of your incomes to meet the costs of a typical home deposit and stamp duty.
RICS senior economist David Stubbs commentated on the current situation by saying: "Even if prospective first time buyers make it onto the market, they face mortgage payments which take up a higher percentage of their take home pay than at any time since 1990. House prices have risen by over 11% a year since 1996 whereas first time buyer incomes have only risen by 3.5% a year.”
"This has forced buyers to borrow ever greater amounts and now higher interest rates are applying pressure to the household finances of recent buyers" he added.
Naturally with house prices spiralling and first time buyer affordability getting ever more difficult, many parents now naturally want to help their children onto the property ladder; apparently they are spending an average of £21,314 doing this.This figure comes from a survey by Alliance and Leicester, nearly 40% of parents either plan on giving financial assistance to their first-time buyer children or have already done so.
Over 30% feel obliged to help out their children and apparently, fathers are especially prone to feeling guilty if they fail to provide assistance. But not every child will be getting a free ride, as the research discovered that 10% of parents have warned their children they will charge them rent in order to secure their own retirement.
But finally, there is a glimmer of hope if you are a first time buyer. House price inflation is at its lowest level since March as both decreased demand and the interest rate hikes appear to be taking hold of the housing market and settling it down.
Nationwide chief economist Fionnuala Earley explained: "The expected slowing results from three main factors, each of which have been around for some time. First, weaker affordability, as house prices continue to grow more quickly than earnings; second the effect of higher interest rates and inflation on consumers’ pockets; and third lower house price expectations."
Overall, with house price growth expected to finally be below earnings growth in 2008, and with possible interest rate cuts in the second half of next year the burden on first-time buyers is expected to begin to ease off. But the fact remains that difficulties for first-time buyers will stay a constant feature of the UK property market for a good while yet.