Do you want to buy a house but don’t know if you have enough money for it? You’ve come to the correct place if you’re still unsure what property you could afford in the United Kingdom.
We’ll look at how far your house-buying budget may stretch based on your yearly income and savings in this section.
Mortgage lender Nationwide has confirmed that UK home prices are at a 17-year high! With skyrocketing inflation, ever-increasing energy costs, and rising interest rates, it’s no surprise that many potential buyers are asking if they can afford to buy a house right now.
Can I afford to buy a home?
When it comes to purchasing a house, many UK citizens will not have the full amount of money required to buy the average (as of January 2022) £274,000 property asking price in their bank account: this is where mortgage lenders come in.
A mortgage lender will frequently lend up to four to five times a borrower’s earnings in order to assist them to purchase a house rather than saving hundreds of thousands of pounds and living on beans on toast for five years.
Longer-term house purchases do not require a deposit, as long as you can satisfy the mortgage lender’s affordability criteria, which considers your planned expenditures and fees as well as your income. Deposits for houses are usually set at ten percent of the property purchase price depending on how much you can borrow.
For example, if you wanted to buy a home for £150,000 and had your heart set on it, you’d have to put down at least £15,000. As a result, your mortgage lender would need to give you (at least) the remaining £135,000 that you will subsequently pay back in monthly installments over a 25
What house can I afford on 30k+ a year?
Lenders typically allow borrowers to borrow up to four times their yearly income. So, if you make £30,000 a year, you might be given up to £120,000 in loans. However, this will rely on whether or not you fulfill other criteria established by the lender to analyze your capacity to make required monthly payments. Individuals earning £30,000 a year should be able to rent properties with an asking price of up to £132,000 when the deposit is combined with a 10% down payment of £12,000.
What house can I afford on 20k+ a year?
Those with an annual income of £20,000 will be able to acquire a home for around £80,000. However, with house prices continuing to rise in the UK, you may be wondering how much house you can afford with only £80,000.
What house can I afford on less than 20k a year?
Individuals earning less than £20,000 a year may face similar challenges to those who make more. Individuals with an annual income of less than £18,000 will only be able to borrow up to £72,000, for example. Buying a suitable home as an individual on less than 20k per year is not simple in the North East
You may also increase your chances of getting a mortgage by applying with a partner or family member. You could potentially double the amount of money that a mortgage lender is willing to offer you if they earn similar annual earnings.
How do you buy a house with a low income?
If you can’t get a joint mortgage, but you still need decent housing, the Government has several low-cost home ownership programs available to you. If you’re a first-time buyer and looking for new-build housing, loans for new homes are available.
If you’re eligible to receive an equity loan for a new-build home, you’ll be required to pay at least a 5% deposit of the property purchase price and arrange a repayment mortgage of at least 25%. This equity loan can cover anywhere from just 5% up to a more substantial 20% of the property purchase price. For London properties, this percentage is increased up to 40%.
Shared ownership, on the other hand, is fantastic if you don’t want to make a large investment or pay monthly mortgage payments for a suitable property. Instead of purchasing the full property, you’ll be able to purchase a portion of it (often 25%, 50% or 75%) and rent the rest instead of paying rent to the landlord.
Begin the search for your new home
Now you have an idea of what home you can afford based on your income and the present help-to-buy schemes offered by the Government, it’s time to start looking for a house – thrilling!
Fortunately, thanks to our simple search filters, looking for a new house has never been easier. You may also limit the minimum and maximum prices to ensure you see only properties that fit your budget while filtering out our available houses for sale by location.
Offering everything from trendy apartments to sprawling family homes, Mistoria Worsley has something to suit every potential homeowner. Explore our impressive selection of properties for sale today.