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First-time Buyer

Buying a house is most affordable in your 40s

Paloma Kubiak
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Paloma Kubiak

Buying a house is most affordable for people in their 40s, research from a real estate consultant has shown.

Analysis of Office for National Statistics’ data on average earnings, house prices and the income to house price ratio for people aged 20 to 50 revealed that “40 is the new 30” when it comes to getting on the property ladder.

The House Buyer Bureau (HBB) found that as the average 18-21 year old earns £13,237 per year, they would need 21.5 times their annual income to afford the current average UK house price of £285,009.

Those in their 20s earning an average of £26,800 would need 10.6 times their income which still sits outside of mortgage affordability calculations used by lenders.

Workers aged between 30 and 39 “have a better chance” of getting on the property ladder, but they have an income to house price ratio at 8.3 with the average salary of £34,226.

Meanwhile, the average first-time buyer age has now reached 37 and if house prices remain high, HBB said affordability could remain out of reach for aspiring homeowners until they reach their 40s.

The average annual income for those in their 40s is £38,574 meaning they have the lowest income to house price ratio of all life stages at 7.4 times.

Ratios increase again for those aged between 50 and 59 requiring 7.9 times their income, at an average of £36,156. Those in their 60s or above would need 10.5 times or higher on an average income of £27,090.

’40 is the new 30′

Chris Hodgkinson, managing director of House Buyer Bureau, said: “40 could well be the new 30 when it comes to the decade that many homebuyers finally make it onto the ladder, as house prices show no signs of falling by any significant margin any time soon, not to mention the fact that the cost of borrowing continues to climb.

“However, this might not be the worst thing as our research shows that your ability to climb the ladder is significantly improved during this stage of life. For those looking to buy it also means they may well be able to borrow the sum required for their dream home, rather than making do with a second best home they can afford at a younger age.

“What’s more, the cost of borrowing is generally lower between the ages of 30 and 50 and so repaying your mortgage each month is also likely to be the most manageable it will ever be.”