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Homebuyers Need to Save for 10 Years to Afford a Deposit in 34 Local Authorities
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Prospective homebuyers will need to save for ten years to be able to afford a deposit for their own home in 34 local authorities across the UK, according to a study by MoneySuperMarket.
The price comparison website analysed average house prices and typical salaries, in combination with data from its mortgage affordability calculator, to work out the average deposit needed to buy a house in the UK’s 441 local authorities.
In 20% of local authority areas, the average minimum deposit is greater than £50,000.
In Camden, the average deposit figure is 56.5% of the property’s value, which equates to homebuyers saving for 27 years – the longest of any area in the UK.
Unsurprisingly, London dominates 16 of the top 20 UK boroughs with the highest average deposit requirements.
While many prospective homebuyers will want to buy a house in the area that they currently live, many will find that affording a home in their own area could well be an impossible dream.
Using Land Registry and Office for National Statistics (ONS) house price data, MoneySuperMarket worked out the average minimum deposit for all local authorities across the UK. This is the minimum deposit that an average salaried couple would need to put down to buy a typical home in their own area. The size of the deposit is determined by how much the couple could borrow on a mortgage, given what they earn.
The results show just how difficult it can be to buy locally, with deposits reaching as much as £688,772 in Kensington and Chelsea and £490,737 in Camden.
The graphic below highlights the highest average minimum deposit in every region, along with the top 50 across the UK.
Landlords can use these figures to determine where they should be investing in private rental homes; areas with high deposit requirements will mean that many prospective buyers are priced out of purchasing a home, so will be forced to rent instead. You will likely find high tenant demand in these locations.
If you do decide to invest, remember to target the right tenants and provide safe, secure and comfortable homes to those renting from you.
Homebuyers Need to Save for 10 Years to Afford a Deposit in 34 Local Authorities
