UK average income before tax) £34,963 - £27,911 after tax (assuming NO student loan and NO pension) (for context: a band 3 nurse with 3 years experience makes £24,336 before tax or £20,631.51 after with no pension)
England average house price: £375,131
Approx ratio after tax: 13:1
Minimum deposit: 5% - £18,756.55
Tax: 0% on first time buyers
Fees: about £1,000 - £5,000
Total cost to get going: Approx £21,750 - nearly a years wage.
Now let’s look where I live: Spain!
Turns out Spain really is a load of countries wearing a hat so getting unified stats is not easy. Let’s try Barcelona:
Average income before tax: €33,837 - €25,470 after tax
Average house price: €376,399
Approx ratio after tax: 15:1
Minimum deposit: 10% - €37,639.90
Purchase tax: 10% - €37,639.90 (plus 1.5% for new builds)
To be fair, the UK is essentially aiming to be America 2.0
Many countries are trending more expensive (Belgium went up 30% house price in 4 years) but the UK is on another level of the wealthy literally owning all property and purposely leaving tens of thousands of houses empty just to spite the working class.
Just to add to this, there’s zero chance you’re getting a 13x mortgage. For a 375k house on a 25k salary you’re going to need something more like 250k to start.
It’s not just America though.
Where I’m from:
UK average income before tax) £34,963 - £27,911 after tax (assuming NO student loan and NO pension) (for context: a band 3 nurse with 3 years experience makes £24,336 before tax or £20,631.51 after with no pension)
England average house price: £375,131
Approx ratio after tax: 13:1
Minimum deposit: 5% - £18,756.55
Tax: 0% on first time buyers
Fees: about £1,000 - £5,000
Total cost to get going: Approx £21,750 - nearly a years wage.
Now let’s look where I live: Spain!
Turns out Spain really is a load of countries wearing a hat so getting unified stats is not easy. Let’s try Barcelona:
Average income before tax: €33,837 - €25,470 after tax
Average house price: €376,399
Approx ratio after tax: 15:1
Minimum deposit: 10% - €37,639.90
Purchase tax: 10% - €37,639.90 (plus 1.5% for new builds)
Fees: 2 - 5% - 7,527.98 - 18,819.95
Total cost to get going: €82,807.78 - €94,099.75
Turns out treating housing as a market to speculate on might just be the problem all along.
To be fair, the UK is essentially aiming to be America 2.0
Many countries are trending more expensive (Belgium went up 30% house price in 4 years) but the UK is on another level of the wealthy literally owning all property and purposely leaving tens of thousands of houses empty just to spite the working class.
I knew someone would say this, which is why I also used Spain where the houses are as expensive, the pay is worse, and the tax is higher!
It doesn’t matter where you go in the West, the dream of liberalism is dead
Just to add to this, there’s zero chance you’re getting a 13x mortgage. For a 375k house on a 25k salary you’re going to need something more like 250k to start.
To add to this, the rule of thumb in the UK is your maximum loan is 4.5x your salary.
The average worker could borrow about £157,000.