The Office of National Statistics (ONS) has published an interactive housing affordability calculator, allowing users to see what level of household income they might expect to need in order to be able to get a mortgage on an entry-level property in their neighbourhood. The calculator uses some assumptions about the size of the deposit, the multiples of income that can be borrowed and the associated costs of moving house as well as the cost of Stamp Duty.
The calculator uses data from ONS’s House Price Statistics for Small Areas and Small Area Income Estimates, and will be accompanied by an article highlighting the headline findings about neighbourhoods across England and Wales in which a household on average income may not be able to afford an entry-level property.
The data included show that a typical household in England and Wales could need an annual household income of £26,444 in order to borrow enough for an entry-level property. New buyers in London could require an income of nearly £60,000 and savings of £55,000. With the average cost of an entry-level home in England and Wales being £140,000, prospective buyers could require £300 stamp duty, an estimated £2,000 for legal and moving costs and £21,000 for a 15% deposit, coming to £23,300 in total.