We often see articles in local papers with clickbait titles such as the above. This was posted by the Bristol Post on the 13th of June. We decided to do our own number crunching and see how accurate these articles really are.

In the paper’s defence, they do say “The figures below are based on the top end (best-case scenario) of the Which calculations for a mortgage, which usually would be 4.5 times the household income most lenders will stretch to, plus a 10 percent deposit from the buyer.”

This is in no way an attack on the Bristol Post or the author, Sophie Grubb, and more of a reality check to what can be achieved.

The stats they give at the top of the article are very interesting for Bristol:

  • According to Rightmove, the average price paid for residential property in Bristol in the past year was£356,232 – up 12 percent up on the previous year.
  • The majority were terraced properties, selling for £332,258 on average, with semi-detached properties selling for an average of £370,759.
  • The estimated household income you’ll need to buy: £72,000.
  • Flats are generally a more affordable option, with £271,282 recorded as the average price.

Using their £72,000 income and 4.5 times borrowing, you would be able to borrow £324,000, which is 90% of £360,000.

I will be using Nationwide for my calculations, along with a few assumptions.

Amazingly, both of my clients were born on the 1st January 1990, and have been in their employed positions for 5 years, both earning £36,000 each. Neither of them have any debt. They would like their mortgage over 25 years.

They don’t have any children and will retire at age 68, which is the expected retirement age for 31-year-olds.

Using these figures, Nationwide will lend them up to £323,300 if they would like a 2 year fixed rate, or £370,300 if they would like a 5 or 10 year fixed rate.

If they wanted to borrow £324,000 with a 5 year fixed rate, the combined income would only need to be £64,000, (this would allow them to borrow up to £329,100).

Nationwide currently have a 5 year fixed rate of 3.39%, with a £999 fee, a free valuation, and £500 cashback. The follow-on rate is currently a variable rate of 3.59%. This would come in at £1,602.97 per month if you pay the fee upfront, or £1,607.91 per month if you add the fee to the mortgage.

For North Somerset, the figures are very similar:

  • Properties in North Somerset had an overall average price of £341,540 in the last year, which is also up 12 percent compared to the previous year.
  • The estimated household income you’ll need to buy: £69,000
  • The majority were detached properties, selling for an average price of £458,559.

Similar to before, with a £69,000 income, and 4.5 times borrowing, you would be able to borrow £310,500, which is 90% of £345,000.

Using an income of £34,500 each, they can borrow £309,900 with Nationwide for a 2 year fixed rate of £354,900 if they take a 5 or 10 year fixed rate.

If they wanted to borrow £310,500 with a 5 year fixed rate, the combined income would only need to be £61,000, (this would allow them to borrow up to £313,700).

Using the same Nationwide 5 year fixed rate of 3.39%, with a £999 fee, a free valuation and £500 cashback, a follow on a variable rate of 3.59%, this would come in at £1,536.18 per month if you pay the fee upfront, or £1,541.12 per month if you add the fee to the mortgage.

For South Gloucestershire, it is slightly lower again:

  • Nationwide currently have a 5 year fixed rate of 3.39%, with a £999 fee, a free valuation, and £500 cashback. The follow-on rate is currently a variable rate of 3.59%. This would come in at £1,602.97 per month if you pay the fee upfront, or £1,607.91 per month if you add the fee to the mortgage.
  • The estimated household income you’ll need to buy: £65,000
  • The majority were semi-detached properties, selling for an average price of £304,056.

With a £65,000 income and 4.5 times borrowing, you would be able to borrow £292,500, which is 90% of £325,000.

Using an income of £32,500 each, they can borrow £291,900 with Nationwide for a 2 year fixed rate of £334,300 if they take a 5 or 10 year fixed rate.

If they wanted to borrow £292,500 with a 5 year fixed rate, the combined income would only need to be £58,000, (this would allow them to borrow up to £298,300).

Using the same Nationwide 5 year fixed rate of 3.39%, with a £999 fee, a free valuation and £500 cashback, a follow on a variable rate of 3.59%, this would come in at £1,447.12 per month if you pay the fee upfront, or £1,452.07 per month if you add the fee to the mortgage.

Finally, for Bath and North East Somerset, they state:

  • House prices across BANES in the past year were at £455,118, up 11 percent compared to the previous year.
  • The estimated household income you’ll need to buy: £92,000
  • The majority of sales were terraced properties, selling for an average price of £416,601.

With a £92,000 income and 4.5 times borrowing, you would be able to borrow £414,000, which is 90% of £460,000.

Using an income of £46,000 each, they can borrow £413,100 with Nationwide for a 2 year fixed rate of £473,100 if they take a 5 or 10 year fixed rate.

If they wanted to borrow £414,000 with a 5 year fixed rate, the combined income would only need to be £81,000, (this would allow them to borrow up to £416,600).

Using the same Nationwide 5 year fixed rate of 3.39%, with a £999 fee, a free valuation and £500 cashback, a follow on a variable rate of 3.59%, this would come in at £2,048.24 per month if you pay the fee upfront, or £2,053.18 per month if you add the fee to the mortgage.

 

 

For a bit of balance, it is worth noting that not many first-time buyers will want to buy a £460,000 property, or should I rephrase, could afford to buy a £460,000 property. I bought my first home in BS4 for £180,000 with a 10% deposit. For a young couple looking to do the same, they would need a combined income of £36,200 to achieve a mortgage of £162,000. This wouldn’t be specific to a particular product and Nationwide currently has a2 year fixed rate of 3.04%, with a £999 fee, a free valuation, and £500 cashback. The follow-on rate is currently a variable rate of 3.59%. This would come in at £771.60 per month if you pay the fee upfront, or £776.36 per month if you add the fee to the mortgage.

You could even extend the term up to 40 years (it’s very rare that this happens) and it would drop the payments down to £583.68 per month if you pay the fee upfront, or £587.27 per month if you add the fee to the mortgage.

We are an independent, whole of market mortgage brokerage and I have used Nationwide as an example due to their low rates and generous calculator. Once we have completed a full appointment with our clients and received all of their documents we will review the whole of the market for them.

If you or someone you know is looking for mortgages in bristol and would benefit from speaking to one of our bristol mortgage brokers then do call us on 01174 520 330.

All information is correct on the 14th June 2021.

Your home may be repossessed if you do not keep up repayments on your mortgage.