1974 vs 2024: How much harder is it for first-time buyers today?

How the average first-time buyer has changed in the last 50 years

Our comprehensive analysis has uncovered the following figures, revealing just how much harder it is to buy your first house as a couple in 2024 compared to 1974:

Our key findings have revealed that:

• House prices have skyrocketed by 2,534% in 50 years - increasing from just £10,027 in 1974 to £265,012 in 2024.

• However, salaries have grown by 1,791% in the same period. In fact, today's salaries are £13,676 short of keeping pace with house prices - or house prices should be £75,000 cheaper.

• In 2024, a couple would need 11 years and 3 months to save for a deposit (by setting 20% of their disposable income). In 1974, the method would take just 3 months.

• In 1974, the average deposit was just 15% of two people's annual salary - but today, it's 86%.

• The average deposit saved (as a percentage of the property price) is increasing too - in 1974, first-time buyer couples would save an average deposit of 5.36%. Today, it's 22%.

• The average age of a first-time buyer in 1974 was 26 years. In 2024, it was 33 years, 8 months.

The shocking shift in house prices vs. salaries over 50 years

When we take a look at the numbers, it becomes clear that the journey to homeownership has changed dramatically over the past 50 years. Back in 1974, the average salary for two people was £3,557, and you could purchase a house for around £10,027.

Fast forward to 2024, and the average salary has climbed to £33,644, but house prices have skyrocketed to £265,012. That’s an increase of over 2,500% in house prices compared to just 1,791% in salaries.

What does this mean for aspiring homeowners? Well, it's clear that salaries have increased, they haven't kept pace with the explosive growth in house prices.

If today’s house prices had risen in line with salaries, they would be £75,000 cheaper than they are

To highlight the imbalance, we’ve calculated how different things could look if the average salary had grown at the same rate as the average house price (+2,542%). 

Today’s average salary would be £47,320 – significantly higher than the current £33,644.

On the flip side, if house prices had risen in line with stagnant salary growth, the average home would cost £189,100 – that’s £75,912 less than today’s average.

A decade-by-decade breakdown of soaring house prices vs. stagnant salaries

We’ve uncovered a widening gap between house prices and salaries in the last 50 years:

• 1974: The average house cost a modest £10,027. Back then, that was about 2.8 times the typical joint salary of £3,567.

• 1984: Over the next decade, house prices tripled to £30,833, while salaries rose to £13,095 for two-people. Interestingly, the price-to-income ratio improved slightly to 2.2 times, offering more affordability than a decade earlier.

• 1994: House prices reached £51,362, while joint incomes grew to £29,318. This brought the ratio down to 1.75 times income, making the early ‘90s the most affordable time for homeownership in the last 50 years.

• 2004: The housing boom of the early 2000s pushed the average house price to £147,462, however, joint salaries grew to just £43,711. Therefore, the house price-to-income ratio spiked to 3.4 times, marking a shift toward more difficult affordability.

• 2014: House prices continued their upward march, reaching £186,544. Salaries, however, grew more modestly to £54,122 for two people, pushing the house price-to-income ratio to 3.45 times. This period followed the recovery from the 2008 financial crisis, making it harder for many first-time buyers to break into the market.

• 2024: Fast-forward to today, and the average home costs £265,012 compared to salaries of £33,644. The result is a record-high house price-to-income ratio of 3.94 times – the steepest of the years analysed. 

The average first-time buyer deposits over the last 50 years

Buying your first home is a huge milestone, and it's fascinating to see how the average deposit for first-time buyers has evolved over the decades. Let's take a look at how these deposits have changed, both in absolute terms and as a percentage of the average annual salary:

Looking at these stats, it's shocking to see how dramatically the landscape has changed over the years. The most striking shift is visible in recent decades:

• In 1994, the average deposit was just 11.67% of two people's annual salary.

• By 2004, this figure had tripled to over a third (35.63%) of an average yearly income for two.

• Today, the average deposit consumes a staggering 86.65% of a joint annual salary.

How saving timeframes for first-time buyers has changed over 50 years

Taking into account the average deposit and salary over the last 50 years, we’ve calculated how long it would take the average couple to save enough for a deposit if they set aside 20% of their annual salary. Here’s how these timeframes have evolved over the past 50 years:

These numbers tell a compelling story about the changing journey to homeownership. In 1974, you could save up for a deposit in just three months, but by 2024, that timeframe has stretched to an extra 11 years. This dramatic shift highlights the impact of rising prices and stagnant wages, making the dream of owning a home feel increasingly distant for many aspiring buyers - even for those buying with someone else.

The average age of a first-time buyer over the last 50 years 

We’ve also uncovered how the average age of a first-time buyer has evolved over the decades:

These figures reveal a clear trend: the average age of first-time buyers has steadily increased over the years. In 1974, the typical buyer was just 26, but fast forward to 2024, and our previous study shows that the average age has risen to 33 years and eight months.

This shift can be attributed to several factors, including longer saving periods and increased financial pressure, as highlighted earlier. As buyers face rising deposit requirements and stagnant wages, the dream of homeownership is taking longer to achieve than ever before.

Despite the challenges, first-time buyer activity is up 21% in 2024

Despite the challenges outlined in our analysis, it’s important to remember that homeownership is still achievable for many first-time buyers. In fact, our research has shown encouraging trends in the market - first-time buyer activity is up by 21% in 2024 compared to 2023. So whilst the path to homeownership may seem longer to achieve than it did for previous generations, it remains within reach for many people - and it can for you, too. 

As mortgage brokers, we can help you understand your options and find the best path forward. Whether it’s finding you the best mortgage deal from our 70+ lenders, advising on savings strategies, or helping you understand government schemes, our expertise can help you become a homeowner.

How the average first-time buyer has changed over the last 50 years

Here are our uncovered statistics for each year analysed.

1974

• Average salary for 2-people: £3,567

• Average house price: £10,027

• Average deposit: £537

• Average deposit as % of income: 15.05%

• Average deposit as % of house: 5.36%

• Average years to save for a deposit: 3 months

• Average age of a first-time buyer: 26 years old

1984

• Average salary for 2-people: £13,905

• Average house price: £30,833

• Average deposit: £1,918

• Average deposit as % of income: 13.79%

• Average deposit as % of house: 6.22%

• Average years to save for a deposit: 9 months

• Average age of a first-time buyer: 28 years old

1994

• Average salary for 2-people: £29,318

• Average house price: £51,362

• Average deposit: £3,412

• Average deposit as % of income: 11.67%

• Average deposit as % of house: 6.66%

• Average years to save for a deposit: 1 year

• Average age of a first-time buyer: 29 years old

2004

• Average salary for 2-people: £43,711

• Average house price: £148,462

• Average deposit: £15,574

• Average deposit as % of income: 35.63%

• Average deposit as % of house: 10.49%

• Average years to save for a deposit: 3 years, 5 months

• Average age of a first-time buyer: 29 years old

2014

• Average salary for 2-people: £54,122

• Average house price: £186,544

• Average deposit: £21,415

• Average deposit as % of income: 39.57%

• Average deposit as % of house: 11.48%

• Average years to save for a deposit: 4 years, 5 months

• Average age of a first-time buyer: 30 years 

2024

• Average salary for 2-people: £67,288

• Average house price: £265,012

• Average deposit: £58,303

• Average deposit as % of income: 86.65%

• Average deposit as % of house: 22%

• Average years to save for a deposit: 11 years, 3 months

• Average age of a first-time buyer: 33 years, 8 months

Sources

We used an array of external data to calculate the figures:

The average salary

• For the years 1974 - 2021 - ONS

• For the years 2022 - 2024 - ONS

The average house price

• We used Nationwide's House Price Index's Q2 figure for every year

The average deposit

This was calculated by using the average deposit % along with the above house price. The following deposit percentages are as follows:

• 1974 - 5.36% - Independent

• 1984 - 6.22% - "

• 1994 - 6.66% - "

• 2004 - 10.49% - "

• 2014 - 11.48% - "

• 2024 - 22.00% - 22% - Home Now UK