OPINION: First-time buyers – they’ve never had it so good

Russell Quirk Hard-pressed youngsters of today have little chance of getting onto the property ladder as house prices accelerate ever skywards and price them out of the market.

What can we do about the UK housing crisis and the unaffordability of Britain’s homes?

Property prices are unsustainable and will eventually have to come down.

Except, that none of these statements are remotely true.

I have lost count of the conversations that I have had recently in radio and TV interviews, on podcasts and on webinars whereby the host or the other guests state passionately that because house prices continue to rise, it follows that they are out of control.

Yet the truth is that house prices remain affordable and where so called beleaguered first-time buyers are concerned especially, frankly …. they’ve never had it so good. That’s right, today’s property buyers are blessed to have such an accessible and affordable market.

Let’s look at the facts to support what I’ve just said. Because rather than first time buyers being somewhat absent from the market, as much of the media and those experts would have you believe, the data says differently.

2021 saw 408,000 first time buyers purchase homes, the highest level in two decades according to Yorkshire Bank. That doesn’t seem to me to indicate a ‘crisis’ of ability to buy nor poor sentiment amongst buyers.

And this is despite first time buyer prices reaching a record high of £214,000 nationally, says Rightmove, up 1.4% last month alone. Of course, prices only rise if there is demand – and demand is certainly evident by way of these stats.

Back in the day, a first-time buyer would cobble together their deposit, pay stamp duty on their purchase and tackle mortgage rates of 10% or so. The reason that first time buyers are able to make up over 30% of all purchases is because they now enjoy the following:

  • Help to Buy – the government sponsored deposit scheme. 339,000 buyers have used the scheme since 2013 to buy properties worth a total of £94 billion
  • The Boris Mortgage initiative – another government sponsored low deposit scheme that will replace Help to Buy and ensure the continuation of the subsidised approach to property purchase
  • The Bank of Mum and Dad – the lender that if it was an institutional lender would be the ninth largest ‘bank’ in Britain. 1.4 million buyers have benefited from it to the tune of £53 million in funds ‘lent’ to support home purchase in recent years.
  • Record low loan costs – mortgage interest rates of close to 1% (HSBC current deal)
  • No stamp duty up to a price paid of £300,000 – over 222,000 first time buyers paid no stamp duty in 2019/20
  • Wage growth – a rise in wage levels that exceeded an increase of 8% in 2021

But what you will often hear trotted out by economists and property ‘experts’ is simply anecdotal. A rhetoric that laments the passing of first-time buyer opportunity, one that we can look back upon nostalgically as something that only existed when house prices were way lower in the 1980’s and 1990’s. This so-called argument is centred around just two facts – much higher house prices now and the difference in the wage to house price ratio. It’s the latter ‘killer stat’ that is peddled to convince us all that it’s all doom and gloom in the world of property ladder aspiration.

It’s true of course that the typical property value is now about eight times that of the average wage. And it’s true that this was nearer to four or five times the average wage a few decades ago. But it is selective reasoning and the kind of twisted arithmetic that we now have imparted upon us from, say, Sage with their convoluted Covid numbers. It’s but an exaggerated analysis that is convenient to the argument of those that wish to see house prices fall – the likes of Shelter, Marxists (all property is theft, after all) and certain buying agents that wish to blacken the housing market’s prospects in order that their ‘skills’ will be in greater need from buyers that must surely need their help in obtaining the best deal in such a chaotic and uncertain environment and which, of course, it is not at all.

Wage to house price ratio is but a small ingredient in the recipe that dictates the reality of affordability. And what is very often, in fact, nearly always forgotten in these arguments is the cost of money. Because when house prices were ‘just’ four times wages, mortgage interest rates were many, many multiples higher than they are today. Therefore even the most hard-of-thinking pundit can surely understand that when the cost of servicing a mortgage plummets, affordability increases dramatically even if wages stand still.

House prices are relative, obviously.

In 2022 home values will increase further in all areas of the UK and especially in London (as deep pocketed overseas investor buyers return and overseas student renters do too). Even a rise in the Bank of England base rate to the lofty levels of one whole percent will not prevent growth. The year will therefore be filled with punchy headlines cautioning the relentless rise of the property market and how out of reach it has become for ordinary folk..

So please, join me this year in shouting at the TV and radio whenever you hear some opportunistic fool telling us that house prices are out of control and that there’s a housing crisis. Seriously, crisis – what crisis?



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  1. Chris Watkin

    31.5% of a FTB’s household income went on mortgage payments in 2021 – in 2007, it was 46% ..


    Meaning the proportional percentage drop from 46% to 31.5% is a 31.54%


    (and London you will all shout – yep – in London its 14.8% cheaper today compared to 2007)


  2. Cheese.

    On behalf of all “normal” <35s making less then £35’000.. Shut the hell up.

  3. Robert_May

    today’s property buyers are blessed to have such an accessible and affordable market.


    That is the contradiction- the market is  so accessible to everyone affordability doesn’t come into it. Whether it is people buying 2nd, (3rd 4th 5th 6th…) homes, couples retaining one of the properties when they move in together,   beneficiaries retaining estate sales,  55 year olds releasing  deposits for BTL or their children’s  purchase or institutional investment in BTL, the problem isn’t  getting a deposit or affording  a mortgage but competing to find something to buy.


    Government borrowing means ultra low interest rates are like a Chinese finger trap where interest rates cannot be used to control inflation. Low interest rates fuel inflates asset prices. It’s hard to see how the cycle of excessive demand for  value inflating properties can be controlled

  4. Mark Connelly

    I agree they have never had it easier or cheaper or ever had more assistance. What they do lack is the buying skills and knowledge. With over half of all FTB purchases falling through last year with an  average £2400 in aborted fees their failure to understand the dynamics of buying costs then dearly.

    Sellers pay agents for the their professional expertise to help achieve the best price they can for the property. FTBs pay nothing hence the figures above.

  5. Eagle60

    Whilst lending remains at multiples of 4-4.5 annual salary. FTB are pegged back from the get go. On £30k pa, £120K-£135K lending + your deposit, for arguments sake lets argue that gets you up to £150k. I’ve seen garages in London for that price, let alone finding a mortgageable and habitable living accommodation anywhere within commuting distance to Zone 1. Contrary to RQ, it is not the property market that prevents FTB from thriving but rather the lending market which is heavily skewed towards those already with assets or living in ‘cheaper’ rural areas.

  6. OverratedAgent

    First time buyers who need extra help just to afford basic homes, at record low interest rates, what could go wrong?


    Spiraling inflation, and interest rate rises pretty much guaranteed over the next few years. Conservative estimates are a 1 – 1.25% interest rate by the start of 2023 (Capital Economics study predicted 1.54% by that time)


    So when all these first time buyers remortgage, they could be seeing an interest rate at 10x their original (0.10% – 1.00%), so a safe estimate would be a doubled mortgage for some people. A flood of negative equity, a flood of properties on the market because of inflated costs. Wages are not increasing enough to support this


    Our generation was blessed with declining interest rates (mostly, looking at you mid-90s)

  7. AcornsRNuts

    Only here for the comments. I never read anything written by RQ.

  8. watchdog13

    Many of us remember 10% interest rates. With inflation spiralling at the moment, I would have thought that it is entirely possible to see interest rates at over 5% in the next few years. This will be ver problematic for those on interest only and variable rate mortgages. Also when the five year term on help to buy matures, again a big strain.


    1. OverratedAgent

      Exactily, this generation think that the government will never raise the interest rate, and have taken out huge mortgages accordingly

  9. Programmer1

    Russell, how do you explain the massive drop in home ownership rate for people in their 30’s, compared to decades ago?

    If first time buying is easier than ever, then more people should be owning houses, unless you think there is some reason why people don’t want to buy a house.

    The statistics are pretty clear and, anecdotally, myself and nearly all of my friends cannot afford to buy a house which is leaving us perpetually paying rent and unable to build up equity, whereas our parents had mostly bought houses by this age.

    This is the single biggest issue that I care about and you are completely wrong on this.

    1. PeeBee

      “The statistics are pretty clear”

      Mr Quirk has other statistics that he prefers, Programmer1.

      Stick around and you’ll find that happens a lot with his “opinion pieces”


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