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First-time buyers pay 7 times more than parents did

Wednesday, 13 April 2011 3:04 PM

The cost of buying a starter home was seven times greater for first-time buyers in 2010 than it was for their parents, according to figures from Safe Home Income Plans (SHIP).

Statistics compiled by the equity release provider showed the UK-wide cost for first-time buyers was 558 per cent higher in 2010 than in 1983.

London saw the greatest increase, reaching 669 per cent more than its 1983 starter home price, which was already the highest in the country.

To buy a property in the capital in 2010, first-time buyers would have needed £244,557 in total, with a deposit of £56,248 on average.

Recent Land Registry figures showed that London continued to rise in price in the year to February 2011, adding a further 3.2 per cent to the typical property value.

SHIP director general Andrea Rozario said: "House prices have risen far faster than incomes have done since the older generation bought their first homes.

"Furthermore, those who bought homes in 1983 and are now likely to be heading towards retirement will have benefited from the increase in value."

With 81 per cent of 65 to 74-year-olds and 79 per cent of 55 to 64-year-olds owning their own homes, the organisation added that they might consider releasing equity in order to help their offspring on to the housing ladder.

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