In the eyes of many, buying a house and taking out a mortgage is a daunting experience, leaving the social norm of renting, and making arguably the biggest financial commitment of your life. This is especially the case if you are a first time buyer. You need to be prepared before you proceed with a mortgage in Manchester, with a large factor being your deposit.
Deposit amounts, purchase prices and loan-to-value percentages for first time buyers vary based on the individual and their circumstances. Recently, we carried out a study on first time buyers in Manchester and what the averages are for these variables. Below is a closer look at the information gathered:
Generally speaking, higher house prices will lead to a higher deposit contribution to receive better rates for the amount they would like to borrow.
When looking at house prices in the rest of the North West, the playing field is pretty even and as such, the average deposit is the same across the board. Results from the study showed that the average first time buyer deposit amount in Manchester is around the £28,000 mark, 17% of the average purchase price.
Many first time buyers can save up a portion of their deposit for themselves, however, we often see part of this deposit being gifted by a family member. In certain instances, this can also be provided by a friend.
Having this gifted deposit provides some much-needed support if the first time buyer is struggling to make up the funds. It can also open up the door to more competitive products and lower interest rates.
As touched upon previously, house prices in the North West are relatively balanced out. Manchester is just a small touch higher with an average purchase price of £167,000, only a 5% increase from the rest of the neighbouring areas.
With this minor increase though, comes more choice. The media capital of the UK and home to the BBC, Manchester is currently revitalising the surrounding area of Salford to create more residential housing.
Your loan-to-value percentage is worked out by dividing the mortgage amount by the property price and multiplying by 100.
The lower the loan-to-value, the better rates you are likely to be opened up to. Reflecting on the previously gathered data, the average LTV in Manchester comes in at around 84%. This is only 1% more than the rest of the North West.
More recently, mortgage lenders have been offering 95% mortgages in Manchester, allowing Manchester first time buyers to get a foot onto the property ladder a little easier.
A booming, multi-cultural media city with over 200 languages spoken (according to Manchester Evening News) and major investments constantly being made, Manchester and its surrounding areas are a prime destination for people to live.
With gifted deposit popularity on the increase and lower interest rates, Manchester could be an ideal place for first time buyers to invest in their first home.
As a mortgage broker in Manchester, we would advise that you speak to a mortgage advisor and get an agreement in principle turned around as quickly as possible so you can be a first time buyer in Manchester ‘right away’.
Date Last Edited: February 13, 2024