Average income for homebuyers reaches its highest point since 2009

New statistics from the Mortgage Advice Bureau’s (MAB) National Mortgage Index, suggest a significant increase in homebuyer income. 

The average homebuyer income, which increased to £40,510 in June, is now 9 per cent higher than the previous year and 2 per cent higher than May, reaching its highest point in four-and-a-half years.

Information, collected from over 800 estate agents and more than 500 brokers as part of the research, revealed that purchase prices have also seen an increase. Whilst the average cost of a home stood at £224,450 in June, this figure rose by 1.4 per cent in May and by 4.5 per cent compared with the same time in 2012.

Despite this increase, the average homebuyer income over the past 12 months has risen 9 per cent, significantly higher than the rate of inflation, which stood at 2.7 per cent when the data was collected. Though housing affordability has ultimately improved as a result, the MAB suggests this could be due to more affluent homebuyers ‘driving up the average’ income.

Further to increased market activity and growing interest, applications for purchasing a home increased by 31 per cent between Q1 and Q2. Compared with Q2 in 2012, this is an increase of nearly 60 per cent, and provides yet more evidence to suggest that the housing market is finally improving.

Head of lending at the MAB, Brian Murphy, said: “June’s figures suggest that the first part of the jigsaw is firmly in place as far as a housing market recovery is concerned. The first instalment of Help to Buy has whetted the appetite for property and sent buyers swarming to their nearest estate agent to see what’s on offer.”

Murphy also suggested that further details on the mortgage guarantee scheme, which will be revealed by Chancellor, George Osborne, later in the year, could be a “crucial move that will open up the market to less affluent buyers.”