The income-house price gap is holding fewer people out of the housing market than high deposits and restrictive income multiples, claims research from Nationwide.
While many people could afford the cost of borrowing for a property, outdated banking policies are preventing many from taking the initial steps, it claimed.
Low, stable interest rates have made the long term cost of borrowing affordable it added ñ while house price growth has caused deposit prices to balloon.
Most providers also calculate eligibility from wage multiples, with an average wage of around £40,000 a year now required to “afford” a £200,000+ property.
Nationwide pointed out that the number of people in the UK aged between 20 and 24 who owned their own homes has fallen from 34 per cent in 1994 to 20 per cent today.
“The proportion of young people who are homeowners has fallen significantly over time,” said Fionnuala Earley, Nationwide’s group economist.
People buying new homes as opposed to moving still make up 40 per cent of all mortgage approvals, but more and more of these are previous owners.
Due to changing social patterns, more people are selling their homes and spending time in rented property explained Nationwide, for instance after a separation.
“No longer can we think of first-time buyers as the fresh-faced young person, or couple, getting their very first foot on the housing ladder after saving hard for a deposit,” said Ms Earley.
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