The house price inflation facing first time buyers is “frankly frightening” according to a new analysis which suggests typical FTB house prices are soaring.

Direct Line Home Insurance says the average FTB needs to find £43,623 more than they did in 2016, a 24 per cent increase, to secure their first property. 

Over the same period, the average salary of a 30-something – the decade that most people buy their first property – has risen by just 10 per cent. 

A typical FTB property is now worth roughly seven times a 30 to 39-year old’s annual salary, a rise from 2016 when it was six times, making the first rung on the property ladder increasingly hard to reach.

Direct Line’s analysis suggests that FTB prices are being impacted by the movements of those in their 30s across the country. 

The average FTB property price, in the 10 local authorities that saw the greatest increase in residents aged 30 to 39 between 2016 and 2021, rose by 24 per cent.  

In the 10 authorities with the greatest decrease in number of 30 to 39-year-old residents, there was a two per cent decrease in FTB prices.

Areas with an above-average increase in residents of those in their 30s, saw FTB prices rise by 22 per cent over the past five years, compared to just 10 per cent in areas with a below-average increase of residents in this age group.

Looking more deeply into local FTB hotspots, the areas with the fastest growing prices in Britain are Burnley in Lancashire (up 45 per cent over the past five years), the Orkney Islands on the north coast of Scotland (44 per cent), Rossendale, Lancashire (42 per cent), Bury (40 per cent) and Rutland, East Midlands (40 per cent). 

These five councils averaged a house value of £119,735 in 2016 and this rose by £50,158 to £169,893 in 2021, an increase of 42 per cent. 

These five areas also saw a nine per cent increase in residents aged 30 to 39-year-old over the same timeframe, compared to a national average increase of just five per cent.

Unsurprisingly, London is the most expensive FTB market, with average prices reaching £440,590 last year. However, it is also the region with the most stagnant FTB market, rising by just seven per cent (£30,323) over the past five years. 

The five London boroughs that saw the sharpest increase in FTB prices (Barking and Dagenham, Hackney, Waltham Forest, Redbridge and Havering) also saw a rise in 30 to 39-year-old residents. 

These boroughs saw a FTB price increase of £55,112, or 16 per cent over the past five years. Over the same time the number of young people living in these areas grew by four per cent.

Across London, the population of 30 to 39-year-olds fell by one per cent as young people looked outside of the capital for their first home – potentially due to their change in working patterns since the pandemic hit. 

Dan Simson, head of Direct Line Home Insurance, says: “The rate at which FTB prices have been increasing is frankly frightening. However, this generation of property owners are facing the challenge of dramatically increasing property prices in traditionally popular areas such as London and instead are buying in places that are less well-known. 

“We may see an even more dramatic emergence of these ‘young towns and cities’ with the increasing prevalence of remote working that enables people to be far more flexible as to where they live.”