Only one in eight potential first-time buyers in the UK can purchase the average FTB property in their area, based on their own financial situation. This falls to just 1 in 100 for those earning £22,850 per year or less.

This is according to the newly launched Skipton Group Home Affordability Index which also  reveals that almost 80% of potential first-time buyers have insufficient savings for the deposit needed to get onto the property ladder in their area.

The picture for renters is equally concerning with nearly four in 10 spending 45% or more of their income on essential housing costs, creating a major barrier to saving for a deposit.

First-time buyers’ affordability levels are worst in the West Midlands (driven by a combination of low deposit levels and moderate house prices), London (due predominantly to the high levels of house prices) and Wales (where lower income levels reduce households’ buying potential).

In contrast, first-time buyers face the best prospects in Scotland (driven by lower house prices) and the East of England (due to above-average income to house price ratios).

The Index, created in partnership with Oxford Economics, utilises data from across Skipton Group businesses, the Office for National Statistics, the Bank of England and third-party external sources[5], to provide fresh insight on the affordability challenges faced by renters, first-time buyers and homeowners by age, income, geography and family-type.

The index points out that even those on higher incomes are struggling  – of those earning over £71,250 per year, only 44% can afford to buy their first home in their local area.

Despite improving during the pandemic, overall housing affordability sits almost exactly where it was at the beginning of 2020, with limited signs of improvement on the horizon.

Commenting on the findings Skipton Group CEO Stuart Haire said: “For some, our findings paint a bleak picture, notably for first-time buyers. The combination of high housing costs, insufficient savings, and significant regional disparities underscores the urgent need for collaborative and targeted interventions to support aspiring homeowners.”

He added: “The scale of challenge of housing affordability is so great that no one person can lead that charge, so we are calling on the government to work cross department, cross Whitehall, cross sector and cross industry, so that together we can really start to solve an issue that impacts so many people. We stand ready to be part of those efforts”.