How much do you really need to earn to buy a house?

9 October, 2023 / words by Emiley Phillips

When it comes to buying a house, many factors come into play – the most common one being cost, after all, buying a home is probably the biggest single transaction of our lives!

As we exist today amid a cost-of-living crisis, it is more important than ever to weigh up the cost of buying a house…how much investment would it really require? How much do you need to earn?

Location, location, location

Depending on where you wish to buy property can impact how much money you would need to earn to be able to afford buying the property. If you want to buy a property in London, for example, it is going to be more expensive than if you buy a house in Blackpool. This of course is due to the relative costs of living in different parts of the UK, with the North being typically cheaper.

Now, you cannot settle for just the property price as this can be supported by a mortgage, making the costs of the property simpler. It is important to also factor in the costs of living, so how much would it cost to run the house in the area you wish to buy. Think about utilities, weekly shopping, lifestyle options. It will soon all add up. Factor this in when you investigate the property location.

Property type

Likewise, to location, the amount you need to earn to be able to afford a property, depends on the type of property you desire.
For a low-cost home, research suggests you need between £5,000 and £10,000 saved up as a deposit – so in terms of how much you must earn, you can figure that one out! Now, if you want to buy a standard UK property, you are looking at between £10,000 and £20,000 in savings. And if you are looking in a more affluent area, at least £40,000 to £50,000 of savings is required.

Plan of Action

From going through the process, some best practice advice and a bit of a plan to keep you going. Start backwards. Do your research into the property you would like to buy, the location and the cost of living there. Keep these numbers in mind.
Speak to a mortgage advisor and see how much of a loan you can get, based on your current salary, and your property price in mind. Typically, the rule of thumb is that you can take out a mortgage loan for up to 4 and a half times your salary – with some lenders varying on the amount and based on circumstances. Nonetheless, see if this matches your requirements.

If it does, great, you are earning what you need! But if it does not match then it’s time to rethink. You can either look for a different property type/location, or you can look for a different job where you can earn more money, or perhaps try for a promotion. Ultimately, from a talk with a mortgage advisor, you will know your options and where you stand as to what you must earn to be able to afford.

Unfortunately, there is no set answer that you must earn X to be able to buy a house. As you have learnt, lots of factors are involved and it can be down to individual circumstances. To leave you some food for thought … it is always possible to make your dream house come true! Keep working hard, earning, saving and let the magic happen. You will get there!

In respect of the information above, this content is only for informational purposes and does not constitute any kind of financial advice.


Emiley Phillips


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