10 places where you can get on the property ladder with a £20k salary

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Ten places where you can get on the UK property ladder with a £20,000 salary have been revealed.

Top of the list is Inverclyde, where buyers can purchase a property with a salary of £20,040, according to data from Zoopla, provided exclusively to The Sun.

This west-central Scottish region has the cheapest house prices in the UK, with typical values of just £106,100.

It means those with an annual salary of £20,040 could afford to buy the property, based on borrowing 4.5 times their income, which is a standard amount banks and building societies might lend.

The top 10 list from Zoopla also includes Blackpool, where the average house price is £123,600.

A borrower could afford to buy a property in the popular seaside town with such a price tag if they earn a salary of £23,340.

Also on the list is Burnley, where the average house price is £120,100 and the annual salary required is £22,680.

Borrowers would need to meet all of a bank’s other lending criteria, something that could include having minimal debt.

Zoopla calculated what salary a borrower would need to secure a mortgage on the properties in its list by assuming they had saved a 15 per deposit and were able to borrow 4.5 times their salary.

While some lenders will allow first-time buyers to borrow more than 4.5 times their salary – if they meet certain lending criteria – the mortgage industry widely sees this income multiple of 4.5 as the maximum that borrowers can stretch to.

The calculations by Zoopla are a simple estimate of the annual salary required and do not take into account individual circumstances.

Take, for example, the Inverclyde average house price of £106,100 and subtract a 15 per cent deposit. This leaves £90,185. 

Divide this figure by 4.5 and the salary required to get a mortgage on that property is £20,040.

Scotland dominates the top three places in the list of the cheapest places where you can get onto the property ladder with a salary of around £20,000.

In second place is East Ayrshire, with an average house price of £106,800.

Once a 15 per cent deposit and income multiples are taken into account, borrowers will need a salary of £20,160 to buy a typical property in this region.

Ranked in third place is West Dunbartonshire, where the average value of a home is £110,000 and where the annual salary needed to buy is £20,770.

While house prices tend to be cheaper north of the border, there are still places in England that are in the list.

These include Hartlepool, which is ranked fourth in the list. It has an average price of £114,100 and an annual salary required of £21,550.

Also in the list is Middlesbrough at £115,900 and £21,890 respectively.

The remaining areas in the list are Kingston Upon Hull, North Ayrshire and Sunderland, where the annual salary required to buy a property is £21,630, £21,660, and £23,000 respectively.

The average values of the properties in the list are in sharp contrast to the typical price of a UK home, which currently stands at £329,648.

Zoopla defined the areas as local authorities and the data covers England, Scotland and Wales.

The data follows the first interest rate cut by the Bank of England in four years earlier this summer.

The Bank of England kept interest rates on hold this month, but is widely expected to cut them again before the end of the year.

When the Bank of England cuts the cost of borrowing, this tends to be passed on via cheaper mortgage rates.

Mortgage rates have shot up in the past couple of years, but have dropped off their peak during this time.

The average two-year fixed-rate mortgage currently stands at 5.46 per cent, according to Moneyfacts.

It compares to significantly more a year ago, when average two-year mortgage rates were more than one percentage point higher at 6.59 per cent.

Mortgage experts said further falls in mortgage rates should make life easier for borrowers in the months ahead.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “Getting on the housing ladder may feel like an impossible ask, given rising rents, the high cost of living, mortgage rates and property prices. 

“However, there are parts of the country where it can be achievable even on a relatively low salary although these locations may not be terribly convenient for work or family.

“For those with their hearts set on more expensive locations, saving hard, asking family for assistance and taking on longer mortgage terms are the usual routes to home ownership. 

“Falling mortgage rates should make life easier in coming weeks and months but even so, the goal of home ownership remains beyond many.”

Next month sees the first autumn statement by the new Labour Government.

Many first-time buyers will be hoping for an announcement in their favour.

Such an announcement could come in the form of stamp duty benefits.

First-time buyers are currently benefiting from reduced stamp duty rates. But these are due to come to an end in April next year.

Some may be hoping that the currently level is extended, reducing the cost of buying for first-time buyers.

If no further announcements are made in the upcoming Budget, it means more first-time buyers will end up paying stamp duty as the threshold reduces from the current level of £425,000 to £300,000.

First-time buyers purchasing homes priced between £500,000 and £625,000 will also lose out as they currently only pay the lower rate of 5 per cent on the amount that falls in this bracket.

Daniel Copley, consumer expert at Zoopla, said: “Although house prices are still on the rise in many parts of the country, if you’re willing to broaden your horizons there are some more affordable pockets where you can get on the property ladder for under £20,000. 

“These include areas in Scotland, the North East and North West, many of which have easy access to major cities and good transport links.”