CAN YOU afford to buy a property in Brighton with the new five per-cent deposit scheme?

Chancellor Rishi Sunak’s latest Budget includes a government guarantee for 95 per-cent mortgages which he claims will turn ‘generation rent’ into ‘generation buy’. 

Loanbird wanted to ascertain just how much you’d need to earn to buy a property, in each city in the UK with Brighton being named the third most expensive.

To do this, they took the average property price in each city, took away a five per-cent deposit to leave the 95 per-cent owed.

They then worked out monthly mortgage repayments and salary needed, based on a mortgage over 25 years with an interest rate of 4.5 per-cent.  

Their research is based on one person buying a property on their own. 

Brighton was named the third most expensive places to buy property in the study, behind London, Cambridge.

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The average property price in Brighton comes in at £410,880.

If you were to buy the average house in Brighton with a 95 per-cent mortgage this would you with £390,336 outstanding. 

This would mean that monthly mortgage repayments would come in at a whopping £2,169.61.

Loanbird multiplied the monthly repayments by three, ascertaining this would be the amount needed to live comfortably. 

This means that your monthly take-home pay as an individual would need to be £6,508.83.

Making the total salary needed for a single adult to buy an average-price property in Brighton £128,353.08. 

Let's just go over that again - a single person looking to buy the average-price property in Brighton must earn more than £125,000 a year.

The Argus:

A single person needs to earn £128,353.08  a year to buy the average priced property in Brighton (image PA). 

What is a 95 per-cent mortgage?

A 95 per-cent mortgage enables you to borrow up to 95 per-cent of the purchase price of the property you want to buy, with the remaining 5 per-cent made up of your deposit.

Having a five per-cent deposit could help you get on the property ladder sooner, as you’ll need to save less of a lump sum.

However, the lowest mortgage interest rates are reserved for borrowers with large deposits of around 40 per-cent or more, but there are competitive deals for buyers with just 5 per-cent to put down.

Buyers should also be aware that a smaller deposit does mean that your choice of mortgages will be more limited.

Working out how much you need to save

If you're looking to the future and hoping to buy a property then it's crucial that you work out early on how you will need to save and what you'll be able to afford.

Using a salary calculator can help you set your sights on how much you will need to earn whilst a mortgage calculator will show you how much you can borrow.