With interest rates and the cost of living increasing, many people are wondering if they’ll ever get onto the property ladder. This is even more true in growing cities like Leeds given the job opportunities and high demand for houses. But not all hope is lost. In this post, we’ll consider multiple factors to determine whether first time buyers can afford to buy in Leeds. And you may be pleasantly surprised. From deposits to discount schemes, average living costs to the most affordable neighbourhoods, here’s what you can expect to spend.
Is it expensive to live in Leeds?
Before deciding whether to move to Leeds, you’ll need an idea of how much it costs to live there. The first thing to note is that it is much more affordable than major cities like London and Edinburgh. But Leeds is more expensive than other northern cities like nearby Bradford.
However, as the largest city in Yorkshire, Leeds arguably has more to offer residents. That includes a thriving job market, extensive leisure facilities, great public transport links and lots of free things to do. Plus, Leeds’s average house price of £227,888 (as of May 2023), is still significantly less than the national average. Currently around 20% less, in fact!
But how do prices compare day to day? Here are some average Leeds living costs for 2023:
· Bus fares: Single ticket £2 / Day Saver £4.50
· Train fares: Off-peak Day Saver £9.10
· Petrol/ diesel: £1.48 – 1.56 per litre
· Utilities (gas/ electric for 2): £190 per month
· 1 litre of milk: 88p
· Loaf of bread: 85p
· Home broadband: £23 – £33
· Simple dinner out for 2: £25
· Cinema tickets for 2: £14
· Gym membership: £30 per month
(Figures based on data produced by: wymetro.com, expatarrivals.com and expatistan.com)
What areas are best for first time buyers?
Of course, there are ways to keep costs down when it comes to first time buyer expenses. The most obvious is to purchase a home in a less pricey part of the city. And while you may not want to live on one of Leeds’s cheapest streets, there are plenty of other options.
Generally speaking, you’ll want to avoid the northern part of Leeds, as many of the wealthiest neighbourhoods are located here. Instead, Bramley, Kirkstall, Pudsey, Morley and Farnley are more budget friendly and all within easy reach of the city centre. Plus, these areas are typically safer than the cheapest districts which tend to have higher crime rates. You can find out more about the current cost of housing in Leeds on our blog.
How much money does a first time buyer need?
With all of that in mind, you’re probably keen to know how much money you’ll need as a first time buyer. Unfortunately, there isn’t a one-size-fits-all answer to this question, as there are numerous factors to consider. But we can provide some average stats to give you an idea.
According to Zoopla, the average property first time buyers can afford to buy in Leeds costs £190,000. Based on that, you’d need a household income of £42,250 (single or combined) to be considered for a mortgage. This is because you can usually borrow 4-5 times your household’s annual salary to ensure you can afford the repayments.
In reality, this means that you’d need to set aside around 40% of your monthly income for your mortgage costs. That figure is based on a 20% deposit and a mortgage rate of 5.5%, so it is definitely variable. And while it may seem high to some, Leeds actually ranks amongst the 10 most affordable places for first time buyers. For comparison, in London, you’d need to earn 45% more than the city’s average income just to cover your mortgage repayments.
What if I can’t afford that amount?
As the average Leeds salary now sits around £37k, you may well struggle to buy a home on your own. Solutions to this problem include paying a larger deposit, opting for partial ownership or choosing a flat or terraced home. The average flat in Leeds currently costs £154,014 and terraced houses around £182,744. Meanwhile, larger, more popular semi-detached homes are selling for £244k. Despite this, apartments take considerably longer to sell, so owners looking to sell a flat fast may accept a lower offer.
Alternatively, if you need a larger property, you may be eligible for the Government’s new First Homes discount scheme.
What is the First Homes scheme?
Introduced in 2021, the Government’s First Home schemes was developed to make homes more affordable for first time buyers. Essentially, it enables local people to buy new build properties for 30% less than their market value. As a result, a brand new home priced at £200,000, would only cost you £140,000.
To be eligible, you’ll need to be able to get a mortgage for at least half the purchase price. The house must cost no more than £250,000 after discount and your household income must not exceed £80,000 annually. If you fit those requirements, you may well be in luck! Learn more.
How much do I need for a house deposit?
First time buyer deposits vary greatly depending on your disposable income, gifted money and more. If you rented first, you may have struggled to save a large amount alongside your monthly expenses. Whereas if you lived at home or in discounted work accommodation, you may have built up a decent savings pot.
Even so, Barclays found that 56% of first time buyers are reliant on family support. So don’t be ashamed to ask for help if you can! On top of that, the average first time buyer age has also risen to between 33-37 given the salary required. But how much do you need to save?
Well, according to Leeds Moneyman, first time buyers in Leeds are putting down an average of £27k. Meanwhile, UK finance found that the average UK deposit is around 22% of the purchase price. However, you can often choose between a 5, 10 or 20% deposit to suit your needs, depending on the provider. Just remember that the more deposit you can pay upfront, the lower the interest rate and monthly repayments. The latter of which will be taken into account by your lender, alongside your income, when assessing your eligibility for a mortgage.
Wondering how best to save up for a deposit? Take a look at Government-subsided Lifetime ISAs to receive an extra 25% contribution on your own funds.
So to answer the question: can first time buyers afford to buy in Leeds? It’s a resounding yes. You may need to save up for a little longer than anticipated before making your move. Or go for a slightly less affluent area and choose a smaller property to start with. But owning a home in Leeds is certainly within reach for working couples and moderately above-average single earners . And if needed, there are low-deposit options and the First Homes scheme to try too.
Already own a property in Leeds and need help selling it?
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