The government's newly announced Your First Home scheme looks set to be accessible to first-time buyers across the vast majority of England, with new research revealing that estimated average first-time buyer household earnings fall below the scheme's income threshold in nine out of every 10 local authorities.
Yopa analysed average annual earnings across local authorities in England, adjusting salary figures to reflect the typical first-time buyer age group of 30 to 39. Yopa then calculated an estimated combined household income based on two average earners and compared this against the Your First Home income caps of £110,000 outside London and £140,000 within the capital.
The estimated average annual salary for a first-time buyer aged between 30 and 39 in England stands at £45,111. Based on two people earning this amount, the estimated combined household income is £90,221, almost £20,000 below the £110,000 income threshold set by the Government for households outside London.
At a regional level, estimated average first-time buyer household earnings fall below the relevant income threshold in every region of England.
London has the highest estimated household income at £123,747, but this remains below the capital's higher £140,000 threshold.
At a local authority level, Yopa's research shows that estimated average first-time buyer household earnings fall below the relevant income cap in 90.3% of areas analysed.
Where first-time buyer earnings exceed the income threshold
Yopa's research highlights 28 local authorities where estimated average first-time buyer household earnings exceed the scheme's income limits, with all of these areas confined to London, the South East and the East of England.
Examples include the City of London, where estimated average first-time buyer household income stands at £234,638, considerably above the capital's £140,000 threshold. Camden also exceeds the limit at £194,975, along with Wandsworth at £176,535 and Richmond upon Thames at £149,702.
Outside the capital, Guildford in the South East records an estimated average first-time buyer household income of £152,502, above the £110,000 threshold. The same is true in South Oxfordshire at £135,205 and Windsor and Maidenhead at £128,355.
In the East of England, St Albans stands out with estimated average household earnings of £169,367, while Brentwood records £135,175.
These areas demonstrate that, although the income thresholds appear broadly accessible nationally, there are pockets of the market where typical dual-income households may find themselves excluded on earnings alone.
Verona Frankish, CEO of Yopa, commented: “The introduction of Your First Home is a positive step towards improving access to homeownership, and our research suggests that the government has struck a sensible balance when it comes to setting the income thresholds.
"With estimated average first-time buyer household earnings falling below the cap in nine out of 10 local authorities, the scheme should be accessible to a broad range of prospective buyers across England, including those in London where higher salaries might otherwise have proved a barrier.
"Of course, meeting the income criteria is only one part of the equation. Buyers will still need to secure a mortgage, raise a deposit and find a suitable new-build property within the scheme's price limits.
"The real test will be whether the government can ensure that additional demand is matched by an increase in housing supply. Without sufficient new homes coming to market, there is a danger that the benefits of the scheme could be absorbed by higher new-build prices, potentially leaving first-time buyers exposed to the same affordability pressures and negative equity risks that previous initiatives have struggled to address.”
