How much of a deposit do you need for a new home?
In 1986 the average deposit for a first-time buyer was £3,800, their income was £11,700 and the average first-time buyer house was £27,000. Things have changed dramatically since 1986 with the average deposit increasing more than 15 times to £60,000, house prices by 9 times to £242,000, however, incomes have only increased 4.5 times on average to £53,000.
Access to a big enough deposit is a massive factor in whether you can own your own home. Some mortgage providers will lend you the money you need if you have a minimum of a 5% deposit (ideally 10%), or a 90% / 95% loan to value (LTV). This means for a £242,000 you’ll need a £12,000 deposit minimum. Something that might not be achievable within a reasonable time frame.
Have you considered Shared Ownership?
With a Shared Ownership property, you will buy a share, which is generally mortgaged, and then you will rent the remaining share from a housing provider such as Bromford.
If we stick with the £242,000 average house price, based on a 40% share of £96,000, you’ll have to save for a deposit of £4,800, or a £3,025 deposit for a 25% share – based on a 5% deposit.
Is it more difficult to buy a Shared Ownership home?
Buying a home through Shared Ownership is a similar process to buying outright. You’ll have to go through the same affordability processes. This is due to mortgage affordability on the share you own and the rent affordability on the share you rent from us. Bromford will be with you every step of the way. Find out more information, Shared ownership.
Can I buy more shares in my home?
If you decide to buy a Bromford home you can buy more shares in your home. This is known as staircasing, take a look at our guide for more information. If you don’t buy a Bromford home then you will have to speak to the housing provider. Although mortgage rates are higher at the moment, buying additional shares in your home means you won’t be paying rent on those shares, meaning you could end up paying less and have the satisfaction that you own more of the home you enjoy.
Find your new home
Bromford and our partners are building brand new Shared Ownership properties up and down the country. Click the county you’re looking at below to see what’s available.
Note: Bromford is not a mortgage lender and cannot offer advice on mortgages. Please seek advice from a qualified mortgage adviser regarding mortgages.