First homes in 1970s cost equivalent of £52k in 2024 it's risen to £200k says Yorkshire Building Society

The amount people need to borrow for their first home has risen dramatically in the last 60 years. In the 1970s, people said their first-time mortgages averaged £11,149 - or £52,220.75 in 2024 with inflation considered. But according to Yorkshire Building Society data, that figure is now around £200,000. 

Not only that, even though first-time buyers appear to be lowering their expectations to smaller pads - with less room and little or no outside space - first homes now cost 6.04 times the average income of £35,724. This is compared to around 2.69 times the typical UK salary in the 1970s. 

Meanwhile, the average 10 per cent deposit is much harder to raise today, too, at £20,000 - more than half of typical annual earnings - and, therefore, one of the biggest barriers to homeownership. 

Ben Merritt, director of mortgages for Yorkshire Building Society, which is offering first-time buyers the opportunity to buy their first home worth up to half-a-million pounds with a deposit of just £5,000, to help them overcome this particular hurdle, said: “Achieving homeownership isn’t easy. 

“We know that house price growth means people are having to borrow much more than their incomes to get on the property ladder, and for some it’s now, sadly, completely out of reach. We want to do our bit to make sure everyone who wants to own their own home has a fair chance of fulfilling their dream.” 

While the number of bedrooms in properties bought since the 1970s has remained similar, there has been a shift in the type of first homes purchased. In the 1980s, terraced houses were the most popular, but in the 1990s, semi-detached homes, with the convenience of a private drive, became a more common choice.

Now, flats are the most popular entry-level property, accounting for 28 per cent of all first-time homes. Other areas around the home are changing, too, as there has been a sharp decline in the amount of people who have a garden. 

In the 1970s, 85 per cent of homes had a garden - but this dropped to just 66 per cent in the 2020s. The age at which respondents said they were getting onto the property ladder has gradually increased, from 24 in the 1970s, to 30 in 2021. 

It also emerged that affordability has been an important factor in choosing a property for borrowers throughout the decades, with 73 and 72 per cent of people respectively citing this as the most important factor in the 1970s and 1980s.

Although the figure was lower for the period 2021 onwards, at 47 per cent, 29 per cent of people also said they were concerned about being able to secure a large enough mortgage. This is compared to 27 per cent in the 1970s - and 11 per cent in the 1980s. 

Yorkshire Building Society’s research, carried out by OnePoll, also shows a growing frustration at the amount of red tape people have to deal with - up from 11 per cent in the 1970s, to 27 per cent in this decade.

Ben added: “It’s clear from the research that some of the factors behind people’s choice of first home have remained stable, like location and how short their commute will be. However, there is growing frustration at how difficult it is to raise a deposit and get on the property ladder, thanks to above-inflation house price rises and ongoing cost-of-living pressures, pushing this prospect further and further out of reach. 

“It just goes to further highlight the scale of the challenges today’s generation of first-time buyers must overcome now to get a look-in, despite being willing to compromise on quality-of-life aspects like having a garden. 

“We firmly believe their aspiration and hard work should be rewarded, which is why we will continue to look at innovative solutions to help them bridge the ever-increasing gap, and to call for industry-wide change aimed at improving the prospects of first-time buyers, via our Home Truths report.”