Dreaming of your own home? This is how much you need to earn to buy one
Business
By
Mirror
| May 04, 2015
If you want to buy your first house, you’d better start by asking your boss for a payrise.
Because on average, you’ll need to earn £41,000 a year to afford one.
And it gets worse if you live in London, according to the study by KPMG. First-time buyers there will need to earn £77,000 - £50,000 more than the city’s average wage.
Jan Crosby, KPMG’s head of housing, said: “These figures make for frightening reading and show that housing affordability is no longer just a problem for lower wage earners.”
Don’t panic - plan ahead
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It’s not quite as scary as it sounds. Yes, we do have a housing crisis - and in some parts of the country affordable homes are basically extinct.
But there are some ways to get ahead of the game.
1. Team up
The KPMG study assumes we’re buying on our own. In fact, many of us will be buying with a partner. So that £41,000 could be made up of TWO people each earning £20,500 a year.
If you don’t have a partner, think about buying with a friend or family member. Or even a stranger.
2. Save for a larger deposit
The researchers imagine us putting down a 10 per cent deposit and borrowing at 4.5 times our income. We can’t change the amount the bank will lend to us, but we can try to find a larger deposit.
We’ve got tips on budgeting and growing your savings here.
3. House hunt
KPMG took the average house price for first-time buyers - that’s £202,765 across the UK and £384,856 in London. You may find you can snap up a cheaper house if you’re prepared to compromise on the garden or location.
4. Move city
Although you might need a banker’s wage in London, the study found you only have to earn £21,219 a year in Northern Ireland to make it onto the housing ladder. Other affordable areas include Wales, the North and Scotland. Find out more about affordable regions here.
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