First-time buyers need to earn £53k to buy a home

In its latest UK cities house price index, the property analyst found the minimum income the first-time demographic needed to purchase a property had risen by 18 per cent in the past three years.

With first-time buyers needing to earn £45,000 in 2015 to join the property ladder in cities across the country, income to buy now ranges from £25,000 in Liverpool to £82,000 in London.

In the biggest UK cities, house price increased by an average of 3.9 per cent in the year to August, with Liverpool and Glasgow recording the fastest growth of 7.5 per cent and 7.2 per cent respectively.

On the other end of the scale, three cities witnessed price drops in the year to August - Cambridge fell by 0.1 per cent, London by 0.3 per cent and Aberdeen by 3.7 per cent.

Northern powerhouses continue to attract first-time buyers, while cities like Cambridge, Oxford and London struggle to host affordable housing...Steve Seal

Richard Donnell, insight director at Hometrack, said the fastest growth is being recorded in the most affordable cities where prices are rising off a low base.

Mr Donnell said cities like London and Cambridge require the highest incomes to buy a home and as a result they are registering flat to falling prices - while cities like Bristol and Bournemouth are starting to register slower growth as affordability pressures increase.

He said: "Higher prices and a further drift upwards in mortgage rates means that these affordability pressures will continue to steadily build - however, there are many cities where affordability remains attractive and prices are expected to continue their upward trend."

The index showed an average house price growth of 14.5 per cent over the last three years, compared with data from the Office for National Statistics finding average wages had grown by 7.5 per cent in the same period.

Mr Donnell said: "House price growth continues to outpace earnings across 16 of the 20 cities covered by the index as buyers continue to bid up the cost of housing on the back of low mortgage rates and high levels of employment.

"The fastest growth is being recorded in the most affordable cities where prices are rising off a low base."

Steve Seal, director of sales and marketing at Bluestone Mortgages, said regional disparities are clear with the northern powerhouses continuing to attract first-time buyers while cities like Cambridge, Oxford and London struggle to host affordable housing.

He said: "Although some may say borrowers should remain optimistic as lenders continue to cut rates and offer competitive deals, there is a significant group of hardworking borrowers who are unable to access these rates purely because they may have fallen behind on a few credit payments due to an unexpected life event."

Mr Seal said as house prices and living costs increase, it is hard for borrowers to contribute towards both a deposit and savings - with the latter, and credit ratings, usually taking the hit.

He said: "The industry needs to recognise this segment of the population as credit-worthy and not group them as repeat offenders - in the meantime, specialist lenders will continue to support these borrowers and give them a fair chance at home ownership."

rachel.addison@ft.com