May 2, 2013 12:49 pm

Cost of buying a house rising much faster than wages and rents

The initial cost of buying a house is rising at a much faster rate than average wages or rents, pushing home ownership further out of reach, according to new research.

The average cost of the first year of home ownership – including a 25 per cent deposit, stamp duty, mortgage repayments and annual maintenance – was £70,538 in 2012, according to the research by the Chartered Institute of Housing.

By contrast, the cost of renting – including a six-week deposit – was £9,622, the CIH said. The cost of the first year of home ownership has risen 73 per cent in the past decade, while the cost of renting has risen by 29 per cent, the CIH said.

Real average household income has risen by just 12 per cent in the past decade, according to the Office for National Statistics.

Grainia Long, CIH chief executive, said: “The cost of owning and renting is soaring while average wages are flatlining, putting [people’s] entirely reasonable aspirations even further out of reach.”

Home ownership levels have been falling in recent years, particularly among younger people, while the proportion of people living in private rented housing has been rising steadily.

Meanwhile, nearly a third of first-time buyers say they do not properly understand the purchase process, according to a survey by the Royal Institution of Chartered Surveyors.

Nine out of 10 of the first-time buyers surveyed by ComRes for RICS said they would be better protected if estate agents were compulsorily regulated.

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