Brits face prospect of unattainable mortgages

Mortgages are expected to become increasingly unaffordable for British homebuyers, with house prices rising apace in the next two decades.

A report from the newly-formed National Housing and Planning Advice Unit (NHPAU) indicates that homebuyers could face house prices that are ten times their annual earnings by 2026.

At present, the cheapest 25 per cent of houses are seven times higher than the annual earnings of the poorest 25 per cent of people. Back in 2000, these houses were just four times as expensive as annual earnings.

Many of those seeking a mortgage loan in 2026 are therefore expected to find that joining the property market has become a distant dream, unless the government acts quickly to reverse current trends.

"First-time buyers have seen a big rise in the deposit needed to buy a home and the amount of their income spent on mortgages. Demand for housing is growing and unless action is taken, pressure on the market will only get worse," said Stephen Nickell, chairman of the NHPAU.

Should house prices continue to rise, low mortgage loans are likely to become increasingly important, particularly to struggling first-time buyers.

The NHPAU report indicates that a third of those who are struggling to get hold of a mortgage are not confident of ever being able to do so.

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