The alarming figures showing how a generation of Britons will lock out the housing market

Alarming figures reveal the extent of the UK’s looming mortgage crisis amid fears a generation will be left out of the housing market and people living in London will need more than 15 years of savings to get up the ladder.

The capital will bear the brunt of the shortage, a stark report from lender Nationwide Building Society warns.

It turned out that the The typical first-time buyer today spends almost two-fifths of their income on their mortgage, almost as much as they did at the beginning of the financial crisis.

A new homeowner typically pays 39 percent of their monthly income toward their mortgage payments, up from an average of 29 percent over the past decade. The last time home loan payments made up such a large portion of the household budget was in 2007.

Alarming figures reveal the extent of the UK’s looming mortgage crisis amid fears a generation will be left out of the housing market and people living in London will need more than 15 years of savings to get up the ladder

The capital will bear the brunt of the shortage, a stark report from lender Nationwide Building Society warns. It turns out that the typical first-time buyer is now spending almost two-fifths of their income on their mortgage, almost as much as they were at the start of the financial crisis

The Borough of Westminster is the least affordable authority in the UK relative to income, Nationwide found, where the typical first-time buyer costs 15.6 times the average income in the area. The cheapest local authority in London, Bromley, has a home price-to-earnings ratio of 7.4

A typical first-time buyer spent 45 percent of their income on their mortgage back then.

Rising food, fuel and energy costs are already straining household finances, with inflation now more than double what it was this time last year.

Mortgages have also become increasingly unaffordable, with rates skyrocketing after September’s mini-budget.

The average five-year fixed-rate mortgage rose from 1.3 percent in 2021 to 6.51 percent in October — the highest since 2010.

Biennial fixes also shot up, hitting 6.51 percent for the same month. Since then, rates have fallen, with the average two-year contract now at 5.63 percent and the five-year contract at 5.43 percent.

According to the report, London has the widest gap between the cheapest and least affordable local authorities in the country.

The Borough of Westminster is the least affordable authority in the UK relative to income, Nationwide found, where the typical first-time buyer costs 15.6 times the average income in the area.

The cheapest local authority in London, Bromley, has a home price-to-earnings ratio of 7.4.

Andrew Harvey, senior economist at Nationwide, said the situation could improve “a little” in the coming months.

Rapid rise: Home price increases have outpaced wage growth during the pandemic, leaving many struggling to save for a deposit

London has the worst house price-to-earnings ratio in the UK, while Scotland has the best

Up and down: Mortgage rates rose sharply in the wake of the mini-budget in September, but are likely to level off this year

He said: “Long-term interest rates, which support mortgage prices, have fallen back to pre-mini-budget levels. This should impact mortgage rates and improve affordability for potential buyers.’

The report also warned that saving for a down payment is still a challenge for those dreaming of owning their first property.

A typical first property is now worth £224,254 – 5.6 times the median income.

That means those who want to climb the apartment ladder with a 20 percent down payment will have to save 112 percent of their pre-tax income.

Friends and family are currently making up the shortfall, with around a third of first-time buyers receiving help raising a down payment in the last year, up from 27 percent in the mid-1990s.