Situation for first-time buyers worsening

First-time buyers are being priced out of the UK housing market, as house price inflation reaches 15 per cent in some areas.

That is according to PricedOut.org.uk, a national campaign for affordable house prices, which says the problem is now out of control.

"Worryingly, the government have not actually acknowledged fully that house prices are bad and that they must do something about it," said a PricedOut spokesman.

"They need to acknowledge house price inflation cannot stay divergent from other forms of inflation because as long as inflation in house prices is up at nine or ten per cent, and in London it is 15 per cent, while that is divergent away from other forms of inflation, the situation is never going to get better for first-time buyers," he added.

The average cost of a property in the UK is now some five times average earnings, meaning it is virtually impossible for first-time buyers to get onto the ladder.

"It has never before been that high. At the same time people are talking about low interest rates making affordability better but interest rates are now going up anyway," continued the spokesman.

However, there have been recent hints from the Bank of England rates may be cut in the near future if certain criteria are met.

While there have been claims first-time buyers are too discerning with their choices, PricedOut reject this.

"I completely disagree that people are being too fussy, if anything people are being forced to live in places they simply don't want to be. All this is because investors are just buying and buying and buying; pushing the market up. It is just simple economics," said the spokesman.

The future also looks likely to hold further problems for buyers.

"What is going to happen is, either the market will correct and that will see the end of the government, or if they manage to plan it the way they want to, we are going to see house prices stagnate – with zero per cent growth for a very long time until wages catch up," concluded the spokesman.