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The cities where you’d need to borrow seven times income to buy a home

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11/02/2022
First-time buyers are priced out of the market in many UK cities, but there are some affordable areas too
The cities where you’d need to borrow seven times income to buy a home

First-time buyers would need to borrow up to seven-and-a-half times their salary to get on the property ladder in some popular UK cities, according to new figures from Mojo Mortgages.

The online broker said that Bath tops the list as the country’s least affordable location, followed by Oxford and London.

Homes in Bath cost £528,530, almost twice the national average of the locations featured in this research of £287,830.

But with residents in the city typically earning £29,940 a year, a couple who’d saved a 15 per cent deposit would still have to borrow seven-and-a-half times their salary for an average-priced home.

While wages are higher in Oxford, a couple would need to borrow 7.29 times their combined salary for a £570,357 property, and in London it would be an income multiple of 7.13 for a £704,138 home.

Richard Hayes, CEO of Mojo Mortgages, said: “First-time buyers could now borrow as much as seven times their salary – but this would be a big stretch for many couples and wouldn’t allow them to buy a property in some of the UK’s most expensive locations.

“Lack of affordable housing has repercussions, not only for the individuals involved but the wider economy and community if workers in lower-paid jobs are priced out of the market.

“Enabling people to borrow more might help them onto the property ladder but much will depend on their circumstances as lenders and brokers must apply strict affordability checks. It’s also important that buyers weigh up whether the location offers the best quality of life for them.”

Affordable areas

Mojo Mortgages found that buyers could still enjoy the buzz of a big city without paying a premium, in Manchester and Birmingham, where wages are above average and housing more affordable.

A couple buying a £235,650 home in Manchester would only need to borrow 3.77 times their salary, while in Birmingham it’d be 3.56 times for a £235,681 property.

Edinburgh and Glasgow are relatively affordable too, as are cities such as Liverpool, Newcastle and Leeds – but bargain hunters could also snap up a property in Hull borrowing just 2.30 times their salary, Bradford at 2.35 times or Gateshead at 2.38.

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