Study: Havering fifth most affordable borough in London for first-time buyers
- Credit: PA
A new study released by an online mortgage broker puts Havering as the fifth most affordable London borough for first-time buyers.
Mojo Mortgages's first homes scheme affordability index took into consideration various factors affecting home affordability in 2021.
The research comes with the mortgage broker estimating house prices to be up 10.2 per cent compared to the previous year.
Factors including house prices, mortgage repayments, average annual salary and monthly take home pay were used by the company to work out where in greater London was most and least affordable.
Havering came fifth as the most affordable London borough for first-time buyers, with the average monthly mortgage repayment taking up 32.5pc of a couple's take home pay, the broker found.
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The finding was based on the average property price of £405,548 and an annual salary of £36,364.
Bexley in south-east London came in top for affordability with the average mortgage repayment taking up to 29.82 per cent of a couple's take home pay, Mojo said.
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The least affordable boroughs in London for first-time buyers in 2021, according to the mortgage broker, were Camden with the average mortgage repayment taking up to 64.14 per cent of a couple's take home pay, Hammersmith and Fulham taking 56.18 per cent and Westminster taking 54.49 per cent.
Mortgage expert, Nisha Vaidya, explained that many factors such as salary, regular outgoings, and debt-to-income ratio will impact whether a home is within a buyer's reach.
She added: “A good rule of thumb is to allocate no more than 35 per cent of your gross income to your monthly mortgage repayments.
“Any more than this and you could become 'house poor', where you own a house, but lack the funds to do other important things such as saving money or going on holiday.”