“The inflation in house prices shown in June’s ONS figures are yet another reminder of the crisis of affordability faced by aspiring UK homeowners. While those looking to upsize will certainly be concerned, it is first time buyers who are going to be hit hardest by these spiralling prices, with the continued need to save for large deposits and prices paid by first time buyers up 5.1 per cent since June 2014. In April, KPMG published research that showed the average wage needed by a first time buyer in the UK to buy a home was £41,000 – nearly double the actual average wage of a first time buyer. As house prices continue to increase, this gap can only be expected to grow.
“The biggest factor pushing prices up is lack of supply - there is an ever increasing demand for home ownership in this country, but there just aren’t enough homes available to buy affordably. We need to see more housing being built and to do that we need more funding for the housing sector, coupled with more reform around land and planning permissions, and an environment that attracts new entrants into the house building sector. And we need to make other tenure options more aspirational too – if we can crack a well regulated, high quality private rented sector, we may see an easing in the UK’s cultural pursuit of home ownership.”
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Frances Shennan, KPMG Corporate Communications
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.