Graduates 'face housing struggle'

Graduate wages are not keeping up with house price

Graduates are finding it increasingly difficult to get a foot on the property ladder, a survey from insurer Scottish Widows suggests.

Nearly 60% of people who have graduated in the past 10 years have been unable to buy their own home, it found.

A combination of low earnings and high house prices were cited as the main reasons for failing to buy a home.

In fewer than one in five cases was the reluctance to commit given as a reason for delaying buying a property.

Financial battle

Owning a home is likely to remain a pipe dream for many Richard Clark, Scottish Widows

Double-digit house price inflation has upped the stakes for would-be first-time buyers in recent years.

It seems even graduates, who on average earn more money than non-graduates, are struggling.

The average price being paid by a graduate for their first home now stands at £122,045, up 14% on a year ago, while in London the average is £179,228.

"The situation really is getting worse for graduates," said Richard Clark, a Scottish Widows spokesman.

"The main issue is that property prices and inflation are continuing to rise, but starting salaries have not moved in line with this.

"First-time buyers are struggling to save for that deposit, and recent interest rate rises are acting as a further deterrent. Owning a home is likely to remain a pipe dream for many," he added.

Prices stalling?

However, a little respite may be at hand for some would-be first-time buyers.

On Thursday, the Nationwide said UK house price inflation had stalled in July, indicating that the five interest rate rises in the past year are beginning to have an impact.

Prices grew by just 0.1% in July, cutting the annual rate of growth to 9.9%.

The building society added that it expected house price growth to slow further in the second half of the year.