According to data from the ONS, UK house prices have risen by a huge 10% in the year to May 2021. This sharp rise in prices is welcome news to property owners, who can enjoy the additional spending power and financial security that comes with this price inflation.
However, those looking to find their first step on the property ladder are understandably viewing this increase with dismay. In just a few generations, owning your own home has gone from an easily achievable aim that can be attained with a couple of years of moderate saving, to a dream that is simply out of reach for many.
It’s true that there are now many more ways of saving than previous generations had access to, such as popular Lifetime ISAs which are specifically designed to help young people save for a deposit, but with house prices rising much faster than wages, younger generations are understandably worried.
The UK housing market is certainly a tough place for prospective homeowners at the moment, but is this pattern repeated elsewhere? In fact, it seems that 2021 has seen house prices rise in many countries all over the world, with only 3 of 40 OECD countries seeing a fall in property values.
With this in mind, we wanted to find out just how tough it is to get on the property ladder for prospective homeowners in different parts of the world. Having analysed several different factors, from the average wages to average property prices, and even the cost of utilities, we’ve found the most and least affordable countries for people to buy their first home. These factors have all been combined into a single Property Affordability Score, which we’ve used to rank the countries from the most affordable to the least.
The ten countries where the property ladder is most accessible
These are the best countries for first-time buyers to find an affordable home and get on the property ladder. They have been ranked according to their overall Property Affordability Score, with 1 being the most affordable and 50 being the least. Did your country make the top 10?
1. India Property – Affordability Score: 9.33
India has the most affordable housing of all the G20, OECD and European Union countries, with a score of 9.33! Relatively low average salaries are offset by equally low property costs per square metre, with very affordable utility costs increasing affordability.
2. Turkey Property – Affordability Score: 9.29
In second place, with a property affordability score of 9.29, is Turkey. A relatively low house price to salary ratio helps to keep homeownership a realistic prospect for first-time buyers in the country.
3. Bulgaria Property – Affordability Score: 8.88
Bulgaria takes third place with a property affordability score of 8.88, making it a great place for prospective buyers who will be able to take advantage of reasonable property prices and affordable bills, despite the country having a low average salary.
The ten countries with the least affordable homes
These are the countries where first time buyers will have the most trouble affording to buy their own homes. High property prices, low salaries and expensive bills all play a part in determining which countries are the most unaffordable.
1. Luxembourg Property – Affordability Score: 2.84
The least affordable country for first-time buyers is Luxembourg, which received a Property Affordability Score of just 2.84. There’s not a lot of space in this tiny European nation, which might go some way to explaining the very expensive cost of apartments, which on average cost as much as £751.16 per square foot.
2. Switzerland Property – Affordability Score: 3.11
Switzerland has the second most unaffordable property market, receiving a Property Affordability Score of 3.11. This wealthy country, nestled in the beautiful Alps, benefits from a pristine environment and is a highly desirable location for its Alpine scenery and high standard of living, which also helps to drive property prices up.
3. South Korea Property – Affordability Score: 3.94
South Korea came third from the bottom, with a Property Affordability Score of 3.94. With relatively low salaries and high apartment costs, South Koreans might find it difficult to get their first step onto the property ladder. However, once they do manage to acquire their home, they will benefit from much more reasonable utility and internet costs.
