Newcastle is the best place for first time buyers to purchase in the UK. Digital broker Mojo Mortgages has for the first time ever, cross referenced the monthly mortgage cost in comparison to an area’s average income to create a true first time buyer affordability index.
Derby, Northampton and Liverpool were found to be some of the most expensive places to purchase for first time buyers. The cost of a property based on the price per square metre was relatively high in these areas, while the average salary was relatively low.
As well as looking at the average local salary and the average monthly mortgage cost, Mojo Mortgages also examined the average costs of monthly bills, commuting expenses and the price per square metre to buy a house or an apartment in that area.
The price per square metre in Newcastle was £1,650, making it cheaper than any other city in the UK, and the average mortgage payment being just 29.05% of a buyer’s income.
Aberdeen ranked second, where the average monthly mortgage payment is 29.57% of a buyer’s average income, and the price per square metre at £2,250.
Along with Derby, Northampton and Liverpool, London was also named as the worst place to purchase if you’re a first time buyer. If you buy a city centre apartment here, you’ll need to earn 45% more than average monthly net salary to be able to afford your mortgage payments. The price per square metre also stands at a staggering £13,068.95.
To help more first time buyers purchase a house, Mojo Mortgages has launched a free service for first time buyers who want to get on the property ladder called MortgageScore™.
This service is completely free to use and looks at affordability and credit history amongst other aspects of income and expenditure to assess how mortgage ready someone is. More specifically for first time buyers, it aims to help them understand their eligibility for a mortgage and helps them get mortgage ready by providing personalised coaching. This is done by using open banking data as well as traditional credit reference agency data.
Richard Hayes, CEO and Co-Founder of Mojo Mortgages, said: “Getting on the property ladder as a first time buyer is notoriously difficult, unless you happen to have a few grand stashed away in your savings account or can ask the Bank of Mum and Dad to help with the deposit.
“Our first time buyer index gives potential homebuyers the chance to see where they could buy, and what’s affordable for them in some of the most popular towns and cities in the UK. What’s more, if they think they need some help in getting mortgage ready, our MortgageScore service can really help them to understand how a lender sees them and what they need to do to get the best possible mortgage.”
Martin Reynolds, Chairman of Association of Mortgage Intermediaries, said: “The output from the inaugural Mojo Mortgages’ property index provides an interesting take on where the current first-time buyer hot spots and challenges are. Whilst some of the data shows expected challenges in London it is surprising in other areas. Mojo Mortgages is working hard for the first-time buyer and the launch of its property index in conjunction with its innovative MortgageScore™ proposition means that they are ahead of the curve with support.”
The score is calculated out of a thousand, and those who score 600 have the perfect score and are deemed as ‘mortgage ready’.
In Mojo’s MortgageScore™ model, even if you don’t have a great credit score, you might still be mortgage ready, and unlike credit scores, MortgageScore™ is transparent and will let customers know why and where they need to improve to get on the ladder.
If a customer isn’t quite mortgage ready, the personalised coaching service will help to identify areas of spending that they could cut down on to ensure they get the best possible score, and therefore have access to a wider choice of lenders to ensure they get on the property ladder.
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