Go.Compare has created a salary checker tool to help would-be homebuyers easily identify to the best location and type of property they could afford on their income.
It’s based on the assumption monthly mortgage repayments would make up one-third of a take-home income.
Currently UK residents need, on average, close to £54,000 to purchase a property, according to research by the comparison site.
For those looking to buy a flat, a salary of just under £31,000 is needed, while a detached house requires a salary of more than £86,600, Go.Compare said.
However, the research also brought into sharp focus the challenges buyers face when it comes to affordability. Indeed, a typical homebuyer must earn £54k to afford a home in the UK but figures from April 2023 show the median gross annual earnings for full-time employees was just £34,963.
According to the insurance comparison site’s report, workers could purchase a flat, which requires an average salary of just over £30,600. However, a terraced, semi-detached or detached house would be out of reach to those on the median UK salary.
The latest property prices across the UK show that England is the most expensive country to buy a house, with an average cost of just under £288,000 for a semi-detached property.
In comparison, the same type of house in Northern Ireland is £100,000 less – at just over £172,000 on average. Meanwhile, Wales and Scotland share similar price tags for a semi-detached property, at £207,791 and £204,717, respectively.
Since 2019, both the average UK house price and the salary required have increased. The average property price across the nation has climbed from £222,721 to £270,967. To keep housing costs affordable for mortgage payers, that has pushed up the salary required to buy by nearly £10,000, from £44,314 to £53,913.
Nathan Blackler, home insurance expert at Go.Compare, said: “Residents of the UK, and potential buyers in particular, will be well aware of high house prices and property market fluctuations over the past few years.
“But our tool allows them to see what that looks like in relation to earnings, putting into perspective the disparity between salaries and homeownership.
“Savers may also find it helpful to get a better understanding of the type of property that might be affordable for them, depending on what they’re currently earning. These figures are based on homeowners’ mortgages taking up one-third of their take-home pay, allowing buyers to budget based on their individual needs.
“When thinking about budgeting, don’t forget to take into account not only mortgage repayments but routine bills and other expenses like home insurance, too, which protects your investment in a house should the unexpected happen.
“It’s also wise to factor in additional funds for unexpected costs such as maintenance, as well as setting some aside for savings and spending on leisure.”
