Respected housing analyst Kate Faulkner is accusing campaigning charity Shelter of ignoring key facts and scaremongering about the alleged difficulties of first time buyers to get on the housing ladder.
Faulkner - a prominent market commentator whose Designs On Property consultancy works with agents and runs a consumer service called Propertycheckists.co.uk - says Shelter’s argument “doesn’t add up at all.”
According to Shelter’s recent report, by 2020 first-time buyers will apparently need an average salary of £64,000 to buy a home, up from £52,000 today. They will also apparently require a typical deposit of £46,000 for a £270,000 first home.
However, Faulkner takes the charity to task on a range of issues:
- firstly she says many areas have typical first time buyer properties that are far less than the £270,000 suggested by Shelter. Faulkner cites two- and three-bed homes in Nottingham currently on sale for around £60,000 to £70,000;
- secondly she says the apparent deposit of £46,000, is based on the assumption that first-time buyers are, on average, paying deposits of 17 per cent. “But they don’t have to do this; most of them could, if they wished, buy a house with a five per cent deposit” says Faulkner;
- she then says Shelter omits to take into account inflation which means that by 2020 the predicted house price rise built in to the charity’s assumptions may be little more than the cost of living increase;
- “the data also ignores the fact that many cities are still seeing property prices 10 per cent to 25 per cent lower than they were in 2007/8 when the credit crunch hit. In Liverpool and Bradford, if prices grow by 23 per cent to 2020, that actually means they will have taken nearly 15 years to recover to the prices seen prior to the credit crunch” says Faulkner.
Faulkner says that instead of scaring first time buyers, there is a responsibility to give them the most accurate information available.
Using Council of Mortgage Lenders and LSL Property Services data, she concludes that London first time buyers can purchase with an average salary of £60,000 - a salary of £30,000 each for a couple or for sharing friends.
“Go to Wales and the average income halves to £30,000 and it’s pretty much the same for Scotland and Northern Ireland. That means two people needing £15,000 salary each” she says.
Faulker says she is “truly shocked” at the absence of information on various Help To Buy initiatives contained in the Shelter report.
“I’m afraid Shelter’s conclusion of these stats just doesn’t add up at all in my view. The only reason they would be ‘doomed’ is because the report would scare them into thinking they could never buy” she says.
You can see Faulkner’s full critique here.