First-time buyer affordability now highest for decade

May 6, 2025 by Mark

Borrowers

The affordability levels for first-time buyers have reached the highest they have been for a decade, according to the latest piece of research into the mortgage market in the UK.

This research was the work of Yopa, an estate agency, and it takes an in-depth look at affordability over a 10-year period. Yopa examined the average property price paid by first-time buyers during that period, as well as their average earnings for the same stretch of time. Those two data sets enabled the company to calculate the relative affordability from year to year.

What the results reveal is that the price to earnings ratio for 2024 was 7.1. This means that 7.1 years of earnings were needed by first-time buyers to meet the average price of a home. The last time the ratio was as low as this was back in 2015, which is the first year covered by the research.

A factor that makes that more surprising is the level of house price increases during the decade. The average price for a first home went up by 63% between 2015 and 2024, but average earnings for first-time buyers only rose by 44%.

This means the price-to-earnings ratio had also been rising – until 2023, when it began to fall. The primary reason for this is that earnings growth has been stronger during the last two years.

Most mortgage advisors who have CeMAP training will view this as a positive, at a point when people buying for the first time face a lot of barriers.