Affordability pressures mount as wage growth lags behind rising house prices
More than half of first-time buyers in the UK are earning less than £60,000, according to recent figures from Twenty7tec, raising concerns that even households with two incomes are finding it increasingly difficult to purchase a home.
The mortgage technology firm has highlighted that home ownership is becoming less accessible for many working families, as affordability criteria tighten and average wages remain around £37,800.
The challenge is compounded by the fact that, with the average property price now approximately £290,000, a joint income of £60,000 typically allows for a mortgage of about £270,000. This leaves a deposit requirement of around £30,000 to reach the national average purchase price.
Regional disparities further complicate matters. In the South East, average prices have surpassed £440,000, while cities such as Leeds and Manchester are experiencing rapid increases, driven by post-pandemic migration and investment.
“Increasingly, the answer is found not in higher earnings, but in outside help,” said Nakita Moss (pictured right), head of lender at Twenty7tec. “Many first-time buyers are on modest incomes, even as they reach their late 30s, which leaves very little room for error when it comes to affordability.
“This has led to people having to wait longer to save a deposit, often skipping smaller flats and moving straight into family-sized homes as they juggle career progression with starting families. From this, advisers are having to reassess how they guide clients on long-term affordability and risk.”
Recent government interventions, such as stamp duty relief for first-time buyers, have provided some short-term support. However, the reduction of the nil-rate threshold from £425,000 to £300,000 earlier this year has limited the impact of these measures on overall affordability.
“When considering each of these factors, we predict that those stuck in ‘Generation Rent’ will choose unconventional methods to get on the ladder,” Moss said. “We are already seeing a steady rise in group mortgages, with friends or family members buying together, as well as intergenerational households and co-ownership living models.
“Our data also shows that around one in seven first-time buyers (15.4%) are now aged over 40, while the number of those aged 51 and over purchasing their first home has risen by 80% in the last five years. Longer-term lending is no longer a niche product but an essential tool, with many mortgages now stretching well into retirement.
“For advisers, it means adapting conversations with clients, helping them think not just about getting onto the ladder but about sustaining affordability throughout the lifetime of the loan. What concerns us, is that if the two-salary ceiling becomes the new normal, what other implications can this mean for buyers, especially second steppers and those looking to buy in later life? One thing is for sure, the traditional path to home ownership is being redefined and without intervention, could we see an entire generation priced out of home ownership altogether?”
Separate data from TSB show that the average age of a first-time buyer has dropped from 32 to 31 over the past year. London continues to have the highest average age for new homeowners at 33, while Wales and Scotland have the lowest at 30.
| Average age of first-time buyers | ||
|---|---|---|
| Region | Q3 2024 | Q3 2025 |
| East Anglia | 33 | 32 |
| East Midlands | 31 | 32 |
| London | 33 | 33 |
| North West | 31 | 32 |
| North East | 30 | 31 |
| South East | 33 | 32 |
| South West | 31 | 32 |
| Scotland | 30 | 30 |
| West Midlands | 32 | 31 |
| Wales | 31 | 30 |
| Yorkshire and the Humber | 31 | 31 |
The survey by Censuswide for TSB found that 17% of recent first-time buyers hope to repay their mortgage before turning 40, and 57% aim to shorten their mortgage term. Of those making overpayments, 43% do so each month.
“Overpaying can be a great way of shaving years off your mortgage,” said Craig Calder, director of mortgages at TSB.
The figures suggest that while some buyers are managing to enter the market earlier and are focused on reducing their debt, the broader trend points to ongoing challenges with affordability, especially as property prices and living costs continue to rise.
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