"It’s not just property values that dictate where homebuyers can afford to house hunt, it’s ultimately our income and our mortgage eligibility that will decide just where we can afford to live"
- Jonathan Samuels - Octane Capital
The CEO of Octane Capital, Jonathan Samuels, has highlighted that amid rising unaffordability in the UK housing market, one city in particular has just 8% of the market within reach for homebuyers – and it’s not London.
Octane Capital analysed current mortgage affordability across 15 major cities in Britain* based on the mortgage purchasing power of the average buyer at 4.5 times the average income and the addition of a 15% deposit.
Octane Capital then looked at what proportion of current market listings fell below the mortgage affordability of the average buyer.
Octane’s research shows that the current average salary in Britain is £38,413 a year. The typical mortgage lender will provide a homebuyer with credit to the value of 4.5 times their income which, at this average salary, comes to £172,859. Add to this a typical 15% deposit which has been estimated at £30,504 and the average person in Britain has a total budget of £203,363 with which to buy a home.
Octane’s analysis of the current housing market shows that there are an estimated 110,488 properties for sale in Britain that fall within this budget, which accounts for just 23% of all live listings.
But on a city level, there are a number of locations where the average buyer has access to an even slimmer proportion of the local market, and nowhere do they have less choice than in the hugely popular coastal city of Brighton.
In Brighton, the average salary stands at £38,248. With this salary, the typical mortgage loan available is £172,116 which, when topped up with a 15% deposit of £30,373, provides a total buying budget of £202,489.
Octane can reveal that across the city of Brighton, there are currently 135 properties for sale that fall within this budget, equivalent to just 8% of all active listings.
This makes Brighton the least affordable city for homebuyers, followed by London where just 9% of the market falls within the average person’s budget.
Other cities where local buyers have access to a below-average proportion of the market include Bristol (11%), Leicester (14%), Nottingham (14%), Manchester (20%), and Edinburgh (20%).
Meanwhile, the most affordable major city is Liverpool where 47% of listings are available with an average local buying budget of £180,911.
Jonathan commented: “It’s not just property values that dictate where homebuyers can afford to house hunt, it’s ultimately our income and our mortgage eligibility that will decide just where we can afford to live.
"Unfortunately, we haven’t seen wages increase at the same rate as house prices in recent years and so the average homebuyer is at a significant disadvantage when it comes to the number of homes they can afford to purchase.
"So although London remains the most expensive area of the UK housing market, it is, in fact, Brighton, thank ranks as the least affordable city based on the level of current housing stock that is available to the average homebuyer.”
