Edinburgh is a lot more affordable than many other UK cities with house prices here averaging £228,009.
With average joint salaries in the capital of around £65,558 and a minimum deposit requirement on a new home of around £11,400 a recent survey reckons it would take about a year to raise your part of the purchase price.
But MoneySuperMarket calculated this by reckoning that each couple could borrow 4.5 times their salary, which even in the heady days of 15% mortgage rates was barely achievable. However compared to other areas, such as Camden in London where the deposit required is around 56 per cent, it is still the case that buying a house here in Edinburgh is within reach of many. In some areas it would take over 10 years to save up the minimum deposit, so perhaps that is another reason why Edinburgh is growing so fast.
Kevin Mountford, banking expert at MoneySuperMarket, said: “As house prices continue to rise, the dream of owning a home becomes harder and harder to reach for so many people. For those who want to take their first steps onto the ladder, reaching the minimum deposit levels required causes serious financial strain and, as our analysis highlights, many might be priced out of their desired area. Similarly, for those who already own their own home but are looking to take that next step up the ladder, the stretch could be a bigger burden than anticipated.
“It is important to strike a balance when relocating and prospective buyers shouldn’t stretch themselves too far. For those who want to maximise their chances of securing their dream home in their dream area, paying off debts is the best way to start, as existing borrowing will be taken into account by a lender when it comes to applying for, or extending, a mortgage. Reducing the amount you spend each month could also help when it comes to boosting the amount a lender thinks you can afford to borrow.
“When comparing mortgages, it’s vital to work out the total cost over the term of the deal, taking both rates and fees into account. Don’t automatically be put off by high fees, as it may be worth paying them to benefit from lower interest rates. Costs can vary greatly between providers, so taking the time to shop around and work out the total amount you have to repay over the term of the offer is essential.”
You can read the full report on the top 50 least affordable areas here, or use the MoneySuperMarket mortgage calculator to find how much you are eligible to borrow.
Founding Editor of The Edinburgh Reporter.
Edinburgh-born multimedia journalist and iPhoneographer.
