"For the average homebuyer, accumulating a mortgage deposit, securing a mortgage offer and keeping up with their monthly repayments in the current climate is an uphill struggle in itself"
- Verona Frankish - Yopa
New research from Yopa analysed current sold price data from the Land Registry, looking at transactions to have completed over the last 12 months, before looking at the average price paid across the top 1% of the market in each region.
Yopa then looked at what you would need to earn in order to secure a mortgage at 4.5 times your earnings in order to purchase at the very top tier of the housing ladder.
According to the figures, the 472,885 homes sold across England and Wales in the last 12 months have done so for a median sold price of £280,000. However, those to have sold across the top 1% of the market have commanded £2.175m on average.
This means that having placed a 15% deposit of £326,250, you would be required to earn 410,833 per year in order to secure a mortgage at 4.5 times your earnings for the remaining £1.9m.
With the average salary coming in at £35,659, even a joint purchase by the average homebuyer would see them falling well short, with a combined income of £71,318 some way off the £410,833 annual income required.
Of course, with London home to the highest house prices in the land, it comes as no surprise that the capital requires the highest earnings if you want to purchase within the top 1% of the market.
In the last 12 months, the average price paid at the top 1% of the London market has been a cool £5.5m. Not only would a 15% mortgage deposit require you to fork out £825,000 up front, but you’d need to earn just north of a million pounds a year in order to secure a mortgage on the remaining £4.7m.
In the South East, you’d need to earn £425,000 per year to purchase within the top 1% of the region’s property market, while this sum also sits at over £300,000 a year in the East of England (£335,278) and South West (£305,056).
Even in the North East, where house prices are at their most affordable, you’d have to earn £156,778 per year in order to be eligible for a mortgage when purchasing in the top 1% of the market based on the average price of £830,000 over the last 12 months.
CEO of Yopa, Verona Frankish, commented: “Although house prices have cooled in recent months, they remain marginally below their record highs, but despite this, almost half a million homes have changed hands over the last 12 months alone, some for a very high price.
"For the average homebuyer, accumulating a mortgage deposit, securing a mortgage offer and keeping up with their monthly repayments in the current climate is an uphill struggle in itself.
"Those looking to do so at the very top end of the market require a substantial income, as the average price paid within the top one percent of the property market sits above the one million pound threshold in no less than seven regions of England and Wales.”
