Saturday, May 28, 2022
UK

Buying a home virtually impossible for vast majority

Buying a home

Due to a particularly frenetic housing market and sustained financial pressure in the wider economy, buying a home today is more challenging than it has ever been

Due to a particularly frenetic housing market and sustained financial pressure in the wider economy, for many couples, buying a home today is more challenging than it has ever been. For the vast majority of individuals, however, it’s virtually impossible.

Research by London lettings and estate agent, Benham and Reeves, has revealed that purchasing a property in the current market is certainly a tale of two halves, as only the best-paid professions possess the purchasing power to go it alone based on current mortgage eligibility.

Benham and Reeves looked at the average base salary of eight different professions and their property purchasing power based on the average borrowing eligibility of 4.5 times their income.

They then looked at how this borrowing ability stacked up when compared to the £235,242 ($289,807) required to buy, based on the current average house price of £276,755 ($340,949), minus a 15% deposit of £41,513 ($51,142).

The research shows that just three of the eight professions analysed could borrow enough to afford the average UK home.

Marc von Grundherr, Director of Benham and Reeves, commented: House prices have soared during the pandemic and the average UK property now costs nearly £30,000 ($36,958) more than it did just 12 months ago.

While mortgage affordability has remained fairly good despite a string of base rate increases by the Bank of England, there are still two considerable barriers to obtaining homeownership, he said.

The first is a sizable deposit that sits at over £41,000 ($50,510) on the average property. The second is actual mortgage eligibility, which is very much based on a level of earnings that has failed to keep pace with the increasing cost of buying a property, he said.

He said: As a result, only the very best paid professions are likely to afford a home in current market conditions when looking to do so on their own.

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