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A baby born today could be paying £483k for their first home, £1.5m in the capital

Research by Winmydreamhome.com (WMDH), the house competition run by London property developers Misuma, has looked at the potential cost of homeownership for a baby born today.

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With the average first-time buyer aged 30 years old, WMDH looked at the current average first-time buyer house price and how this has changed historically, before forecasting house price growth based on the interpolation of historic data over the next 30 years.

Today across Britain, first-time buyers are paying £193,194 on average to get on the ladder but this could climb to £482,741 over the next three decades based on historical trends – an increase of 150%.

This increase would be highest across England, climbing 160% from an average cost of £206,018 today to £535,340 in 2049. The average FTB could be paying £278,468 to get on the Welsh ladder in 30 years, a 100% increase, while Scotland would be the most ‘affordable’, up 67% to £203,760 from £122,148.

Despite a current period of problematic price growth due to Brexit, London would remain the most unaffordable region of Britain by some way. The average FTB in London currently pays £410,084 to get a foot on the ladder but should prices maintain their growth based on historical trends, this cost could spiral to almost £1.5m by 2049 – an increase of 259%.

The South East would see FTBs pay a hefty £731,631 in 2049, joined in the £700k club by the East of England (£728,874). The South West would be home to an average FTB cost of just over half a million pounds, while the East and West Midlands would hit £405,945 and £397,741 respectively.

The North West, Yorkshire and the Humber and the North East would be the most affordable but would still see FTBs paying between £160k-£291k for their first home.

Marc Gershon of Winmydreamhome.com, commented:  

“A scary prospect but one that could materialise if we fail to address the lack of affordable housing being delivered, the attack on buy-to-let landlords restricting rental stock and the failure of wages to keep pace with property prices.

The tough task facing current home buyers is well documented but for those born today, the task of getting on the ladder could be nigh on impossible.  

For many, competitions like win my dream home are a bit of fun in this day and age, fast forward 30 years and they could be the only realistic option for the majority when it comes to securing some bricks and mortar.” 

Location Current FTB house price (2019) Future FTB house price (2049) Change (%)
Great Britain £193,194 £482,741 150%
England £206,018 £535,340 160%
Wales £139,436 £278,468 100%
Scotland £122,148 £203,760 67%
       
London £410,084 £1,473,551 259%
South East £256,636 £731,631 185%
East of England £241,704 £728,874 202%
South West £210,212 £516,617 146%
East Midlands £161,703 £405,945 151%
West Midlands £164,642 £397,741 142%
North West £137,461 £291,366 112%
Yorkshire and the Humber £139,206 £287,914 107%
North East £109,306 £164,592 51%
Future house price predicted using SPSS program based on historical FTB house price data and a projection period of 30 years.

Property

Cost of maintaining a buy-to-let hits £12k a year in parts of the UK

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Leading property management platform, Howsy, has looked at the cost of maintaining a buy-to-let property each year and how this varies across the UK.  

Buy-to-let can be a tricky business if you don’t tackle it properly and there are a whole host of costs that can trip up the amateur investor. From the more obvious additional three percent stamp duty tax, to various other tax implications, void periods, mortgage costs, agency fees, the cost of finding a tenant, and more, Howsy’s previous research shows the average buy-to-let brings an annual return of just £2,000.

With the Government’s continued attack on UK landlords, making the most out of your investment financially can be tough and even when you consider all financial commitments for a property, many can still be caught unaware by out of the blue maintenance and repair costs. 

Buy-to-let landlords should squirrel away savings in anticipation of these events and an industry rule of thumb is an annual budget equivalent to 1% of your property’s value. 

So what does that equate to?  

Across the UK landlords should be tucking away an annual budget of £2,344 to cover repairs and maintenance, with this rising to £4,746 in London, with the North East home to the lowest repair costs at just £1,328. 

Of course, markets with higher rent returns may seem promising from an investment standpoint but the higher the reward, the higher the cost when things do go wrong. In Kensington and Chelsea, this annual 1% saving climbs to an eye-watering £12,292, hitting nearly £9,000 in both the Cities of London and Westminster.  

Outside of London, South Bucks and Elmbridge are home to the most expensive buy-to-let maintenance costs at £6,091 and £6,019 respectively.

Head to the likes of Burnley or Blaenau Gwent however, and this yearly maintenance budget drops to less than £1,000 a year.

Founder and CEO of Howsy, Calum Brannan, commented: 

“The buy-to-let sector can be a minefield for the amateur investor and now more than ever, it’s imperative that you do everything you can to maximise the return on your investment.

While technology now allows a greater level of control and service when managing your investment at a lower cost via online platforms, it isn’t just about the financial side of things. Providing a fit for purpose property is not only a legal requirement but essential to ensure a happy tenancy and a reduction in void periods.

Of course, things can go wrong and having the budget available to fix them is a must. In the worst-case scenarios, a cash pot equal to one percent of your property’s value might not be sufficient, but it should cover you for most eventualities and is a good benchmark to start on.

As with all buy-to-let investments, good preparation, organisation, and education are key, and whether you go it alone or have a great management agent if you stay on top of things, a bricks and mortar investment is still one of the best you can make.” 

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