According to the trade body the Intermediary Mortgage Lenders Association (IMLA), the average price of a house in the UK surged to 8.8 times the average income. This was up from a previous high of 8.7 times in August 2007. 

IMLA’s report, The Mortgage Affordability Paradox, indicated that the UK continued to experience a housing affordability issue despite record low mortgage rates. 

It found that although mortgage interest and capital repayments reached a record low of 16.7 per cent of a homeowner’s income in 2020, first-time buyer numbers dropped.  

The association said that last year, there were 200,000 fewer first-time buyers in the market compared to previous data. 

Kate Davies, executive director at IMLA, said: “We speak often about the challenges that plague the housing market, but our latest report brings to light just how severe these are. Even with the costs of borrowing at relative lows, many aspiring homeowners will still struggle to step onto the ladder without the support of loved ones. 

“This paradox is something that we must all tackle to ensure the same opportunities that we have benefited from are made available to coming generations.” 

She added: “It’s certainly time for a rethink. We need a clear vision [on] how the many components of the housing and mortgage market pull together to boost housing supply, better keep house price growth at controlled levels, and, ensure safe borrowing practices.  

“Some time on from the peak of the pandemic disruption we would urge government to again place this high up on its ‘to do’ list.”