The least affordable places to buy a property in the UK where house prices are SEVENTEEN times the average salary
Most mortgage lenders will only allow prospective homeowners to borrow up to 4.5 times their salary
BUYERS must borrow an average of SIX times their salary to buy a home, new research has found.
Mortgage lenders usually only allow borrowers to take out home loans which are 4.5 times their salary, meaning some people are faced with never owning a property.
The figures have been compiled by online estate agent eMoov using house prices according to the Land Registry and Office for National Statistics wage data.
It highlights the gap between wages and house prices and shows there are huge regional differences with the majority of the least affordable homes located in London.
As property prices continue to rise, it means prospective homeowners in the capital need around 12.05 times the average wage to get a mortgage.
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Hackney tops the list of least affordable locations, as the average house price in the area is £575,511 - around 17.03 times the average wage of £33,800.
It’s followed by Brent and Haringey where prospective buyers need at least 16 times the average annual salary for the area.
Anyone wanting to own a home in Purbeck in Dorset must also earn a fair whack, as the average house price sits at £335,950 - around 14 times the average salary.
Other areas in the top 10 least affordable areas are Oxford, South Bucks in Buckinghamshire and Hertsmere in Hertfordshire.
Three Rivers in Hertfordshire, South Hames in Devon, Broxbourne in Hertfordshire, Christchurch in Dorset, Surrey's Epsom & Ewell, and Brighton & Hove in East Sussex also feature in the list.
It also found the most affordable areas in the UK where homeowners need around five times the average salary.
The locations include Burnley in Lancashire, along with East Ayrshire and Inverclyde, which are both in Scotland.
How to get help buying a house
THERE are several government schemes available to help you get on to the housing ladder.
- Help to Buy loan: This scheme is for those who have a 5 per cent deposit, and is only available on new-build properties that are worth less than £600,000. The government lends you up to 20 per cent of the property value (interest-free for the first five years) which gives you access to cheaper mortgages. You will need to pay this back at the end of the mortgage or when you sell.
- Starter Homes: First-time buyers under the age of 40 can access this new scheme. You’ll get a 20 per cent discount on the market value of the property (new-build only) but you cannot sell or let the property for five years after you buy it.
- Shared ownership: This scheme is available to non-homeowners who earn £80,000 a year or less (£90,000 in London). People can buy a share of a home from a housing association and continue to rent the remainder. Buyers will need a ten per cent deposit as well as money to cover stamp duty and other fees. You’ll also need to find a mortgage lender that is willing to lend on shared ownership properties.
Founder and CEO of eMoov.co.uk, Russell Quirk, said: “When London is thrown into the spotlight in terms of the unaffordability of its property market, many are quick to highlight that the wages on offer are higher in the capital.
“However, this research shows that despite this, the gap between what hopeful London buyers are earning and what they are having to pay for a property is still way out of kilter and climbing.
“Not only this, but the reality gap between the average wage and wage required for mortgage approval is a staggering.
“Of course, many of us buy with a partner or friend in order to get on the ladder, but even when sharing this burden there is still a considerable financial mountain to climb.”
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