By Nick Taylor, of Hadley Taylor in Norwich
Call me simple but I don’t buy this line about lack of affordability in the UK property market. The media and particularly the dear old BBC never stop going on about how unaffordable property is in this country particularly for first time buyers. Well let’s just look at the facts. Firstly house prices in East Anglia are about as low as they’ve been for about 5 years – already starting to sound affordable wouldn’t you say? Interest rates are lower than they’ve ever been – sounds even more affordable. Now let’s look at the average UK house price, which is £167,000 according to the land registry, and the average UK income, which is £40,000 according to the Office for National Statistics. Now I know we don’t earn quite as much as those clever folks in London so our average salary here in Norwich is a little less than the UK average but so too is the average house price. So let’s look at the plight
of first time buyers – a one bedroom flat in a decent part of Norwich can be acquired for about £90,000 and a person on average income in Norwich earns £30,000. So with a 20% deposit a first time buyer needs to borrow a multiple of 2.4 times their salary – sounds very affordable to me. The issue here is not affordability at all. The issue is that first time buyers have changed the game. They don’t want to buy one bedroom flats which is what people of my generation did 25 years ago, instead they want a 3 bedroom house and that is why the BBC talk about there being a lack of affordability in the UK housing market. The evidence of this trend is all too easy to spot from where I’m sitting. I sell 3 bedroom houses to first time buyers and I sell 1 and 2 bedroom flats to landlords who then let them out to young people who live in them until they can afford to buy their 3 bedroom house. Now don’t get me wrong, first time buyers and indeed any type of buyer are entitled to buy whatever they want but what they shouldn’t do is complain about how unaffordable property is because in truth they haven’t had it so good for years.
Nick Taylor is on 01603 250248.