When it comes to taking our first step on to the property ladder, location is often key. But if our first choice destination is financially out of reach, where should we look that’s both desirable and affordable?
This is where Zoopla can help. Our latest data examines average house prices to show exactly how much a first-time buyer needs to earn and save for a deposit to buy a home in the UK.
This means that if you’re looking to buy in Bristol, our map, below, shows you the postcode areas that are most affordable.
Quick stats about Bristol:
- Average first-time buyer property (two-to-three bedroom house) in Bristol costs £293,447 with the average deposit required being £46,115.
- Average income required from a first-time buyer household in Bristol is £62,037.
- Most affordable area is Avonmouth (BS11) on the banks of the Severn Estuary with an average house price of £216,242. A deposit of £33,982 is required, with an income of £45,565.
- Bishopsworth and Bedminster Down (BS13) to the south of the centre also offer value. The average first-time buyer home costs £223,342, requiring a deposit of £35,098 and a household income of £47,061.
- The most expensive location is the sought-after area around Clifton Suspension Bridge (BS8) where the average price is £435,785.
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How have we calculated it?
We've looked at the average price of two-to-three bedroom homes - the most common type of property purchase for first-time buyers in Bristol.
We've then taken the average mortgage advance from lenders in Bristol, and worked out both the average deposit required and the amount that needs to be earned based on buyers being able to borrow up to four times their salary.
How can I afford a home as a first-time buyer?
When looking to buy a first home, it’s key to build as big a deposit as possible. This allows you to borrow a lower percentage of the overall value of the property and provides lenders the security to give you a better mortgage rate.
Aim for a minimum 10% deposit. It is possible to put down a deposit of just 5% in some cases, but this means the interest rate you pay on your loan - and therefore your monthly repayments - will be higher.
The Government has dedicated Help to Buy schemes to help you build a deposit. For certain property, you can also use its Equity Loan scheme, where the Government chips in by lending you 20% of the purchase price interest-free for the first five years.
Provided you have a solid credit score, banks and building societies will lend up to an average of four times your salary. If you are buying as a couple then combining your incomes should benefit you here.
This is a good starting point to work out how much you might be able to borrow and therefore how big a home you can afford. You can then start your search.
Don’t forget that when buying a home, other fees will apply, including solicitor and moving costs. The good news is that stamp duty land tax is waived for first-time buyers on the first £300,000 of the purchase.
For more help purchasing your first home, read our first-time buyers guides here.
First-time buyer affordability in the South West
If affordability for first-time buyers in and around Bristol still seems stretched, then a look at the overall picture of the South West in our map, below, explains why.
Other than pockets in Cornwall and Devon, the areas around Bristol, Bath and the Mendip Hills are some of the priciest around.
For more choice in stepping on to the ladder, first-time buyers may instead need to head east to Wiltshire and a town such as Trowbridge, further south in Somerset to Shepton Mallet, or south west to Weston-super-Mare and Bridgwater.
First-time buyer affordability in the UK
If you're prepared to cast your search further afield, then our first-time buyer affordability map of the UK, will help. While London and the South East will stretch affordability, there are plenty of areas where those with household earnings of under £30,000 can take a first step on the ladder.
It's also worth noting that while the UK-wide map might provide a helpful overview, the property market varies on a far more local level and you really need to take a closer look at locations, like we've done with Bristol, above to seek out value.
Full methodology: House prices taken from a subset of Zoopla-partner Hometrack's stock valuation database (one-to-two beds for London and two-to-three bedrooms for rest of UK). Median price calculated as of June 2018. Median advance taken by region (c75% for London, c85% outside of London) from UK Finance. Term of Mortgage: 25 years. Interest rate: 2.00%. Loan to income ratio: 4.0. Earnings required for affordability is greater of those required to satisfy loan-to-income threshold or income required to service the mortgage.