Londoners looking to buy their first home will need to earn over £100,000 a year by 2020, research by housing and homelessness charity Shelter has found.
The study said this was an increase over the quarter on the £80,000 needed for a typical first time buyer’s mortgage today.
On top of this, first-time buyers will also need an average deposit of £138,000 to keep up with rising house prices in the capital.
Campbell Robb, Shelter’s Chief Executive, said: “When house prices are increasing fifteen times faster than the average wage, it’s no wonder Londoners on ordinary incomes are being locked out of a home of their own.
“With the situation only set to get worse, Generation Rent will be forced to resign themselves to a life in expensive, unstable private renting, and wave goodbye to their dreams of a home to put down roots in.
“It doesn’t have to be like this. The next Mayor of London has the power to turn our housing crisis around, and with only weeks before Londoners go to the polling booth, the candidates must commit to investing in homes that people on ordinary incomes can actually afford and making renting more secure.”
The research looked at the salary and deposit needed for the average first time buyer today, and calculated what they would be in 2020 if they grew in line with projected increases in house prices.
Its findings were based on London School of Economics professor Paul Chesire’s recent projections for Santander that UK house prices are expected to increase by 23 per cent by 2020.
An average priced home costing £280,000 today, would therefore cost around £344,000 five years from now and over half a million in fifteen years’ time.