Based on the average monthly mortgage payment as a percentage of income, Exeter was the 10th least affordable location in England for first-time buyers
New figures have revealed that Exeter is now the 10th least affordable location in England for first-time buyers (FTBs).
The first Homes scheme affordability index – compiled by online mortgage broker Mojo Mortgages – looked at various factors affecting home affordability in June 2021 including house prices, average annual salary and monthly take-home pay to work out where in England was most and least affordable.
Based on the average monthly mortgage payment as a percentage of income, Exeter was the 10th least affordable location in England for FTBs with the average monthly mortgage repayment taking up 35.03 per cent of a couple’s take home pay.
This is based on an average property price in the city of £327,165 and an average annual salary of £25,881, with a 10 per cent deposit and a mortgage term of 30 years at 3 per cent interest.
Oxford was the least affordable location for FTBs (49.37 per cent) with Bath (47.65 per cent) and London (47.12 per cent) making up the top three.
In contrast, it was Bradford was the most affordable for FTBs followed by Blackpool and Stoke-on-Trent.
With an average property price of £145,981 and an average annual salary of £28,790, this equated to 14.30 per cent in terms of monthly mortgage payments as a percentage of income – the lowest in England.
Blackpool (15.94 per cent) and Stoke-on-Trent (17.35 per cent) followed closely behind.
The figures have been released following the launch of the Government’s First Homes scheme this month, which is designed to help FTBs and key workers onto the property ladder in their local areas that might otherwise have had to move to another city to afford their first home.
First Home properties will be priced at a discount of at least 30 per cent of the original market value to allow more affordable deposits and mortgages with prices being capped at a maximum of £250,000, while prices will be capped at £420,000 in Greater London.
While of course it’s important to remember the 30 per cent plus discount will apply throughout the lifetime of the property, and will apply when you eventually sell for the first time, a First Homes scheme property is still very much worth considering regardless of location as an option for first-time buyers looking to get onto the property ladder, said Cassie Stephenson, director of mortgages at Mojo Mortgages.
The savings available – particularly allowing first-time buyers access to higher LTV (loan to value) mortgages through reduced deposits – could also mean better access to lower interest rates and improved overall savings across the lifetime of a mortgage. Plus of course, purchasing a home is a significant long term investment towards your financial future as opposed to lining a landlord’s pocket, she said.
She said: We’re excited to see how this new scheme develops over the coming months as new properties and developments continue to crop up across England.
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