Friday, August 29, 2008

37k to qualify for most competitive mortgages

First time buyers or those who have entered the property market recently will struggle to qualify for the most competitive mortgages

Homebuyers now need a deposit of £37,119 to qualify for the most competitive mortgage deals, new research from shows. The average deposit necessary has soared by 43 per cent from last year when it was £20, 980, the online mortgage company says

Posted by matt_the_hat @ 08:41 AM (798 views)
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4 thoughts on “37k to qualify for most competitive mortgages

  • OK this is great news. I am no where near the ammount now required and I earn 40+ a year. So if I can’t save it there are going to be few otheres who can, especially those with kids. Just further evidence that house prices need to fall further, rather than interest rates increase.

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  • Well I’ve got a £60’000 deposit and I wouldn’t dream of buying now so for me it is irrelevant. I think most people who have worked hard to save over a number of years, to raise a substantial deposit are not likely to volunteer their money to go up in smoke.

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  • This is the oft ignored fact of the current malaise in the housing market.

    Only a year ago 100% morgages were commonplace. All you needed, as an FTB, was a couple of thousand to cover the fees. Now, that same FTB will have to save atleast £10′ to £12,000 as a deposit plus fees! How long does that take on average income?

    Point is, while sellers wait for FTBs to save, prices will continue to fall.

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  • @Fingerbob: median gross annual salary, calculated from the 2007 ONS survey weekly earnings, is £19,500. The personal allowance will be £6,035 as of September (to make up for abolishing the 10% rate) so £13,465 is taxable at 20% = £2,693 tax. National Insurance is assessed weekly, the weekly income was £374.90; you pay 11% NI on anything over £105, so that’s £29.69 per week NI or £1,543.88 for the year.

    So net salary is £15,263.12. The rest depends on where you are and how much you’re spending on rent, food, travel etc. Living with parents and walking to work, you could get a decent deposit within a few years. Renting in high value areas could see you spending £750 per month on rent for a one-bed flat, leaving around £500 for all other expenses for the month and saving maybe £100: it’ll be many years before this person could buy.

    That £37k seems to be calculated from a percentage of the average house price and will fall as prices go from obscene to merely ludicrous.

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