New affordability tool calculates how much you’ll need to buy a house based on where you want to live
FIRST-TIME buyers in England and Wales need at least £23,000 for a deposit, fees and legal costs, according to Office for National Statistics (ONS) data.
The ONS has created an affordability calculator which allows home-buyers to see what level of household income they might expect to need to get a mortgage on an "entry-level" property in their neighbourhood.
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The average cost of an entry-level home in England and Wales is currently £140,000, prospective buyers usually require £300 stamp duty, an estimated £2,000 for legal and moving costs and £21,000 for a 15 per cent deposit, coming to £23,300 in total.
An entry level home refers to the lowest property price in each area.
It said a typical household in England and Wales could need an annual household income of £26,444 to be able to borrow enough for an entry-level property, while new buyers in London could require an income of nearly £60,000 and savings of £55,000.
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The calculator uses some assumptions about the size of the deposit and the multiples of income that can be borrowed.
For example, it assumes that you would want to pay a 15 per cent deposit and you'll want to borrow four and half times your income. It also takes stamp duty costs into consideration.
You can adjust these measures to bring them closer to your own circumstances.
Last month, data by Halifax - the UK's biggest mortgage lender - suggested that more first-time buyers bought a home last year than any year since 2007.
It said would-be owners usually raise around £32,321 for a deposit - more than double the amount needed a decade ago. It research did not include moving costs, such as stamp duty and solicitor fees.
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