How first time buyers in Leeds could benefit from 5% mortgage scheme

This is how the 5% mortgage scheme could help first time buyers in Leeds

First-time buyers in Leeds could particularly benefit from the Government-backed 5% deposit mortgage scheme, analysis suggests.

The new mortgage guarantee scheme, revealed in Chancellor Rishi Sunak's Budget, will be available to current homeowners as well as first-time buyers looking for a property worth up to £600,000.

What will it mean for first-time buyers in Leeds?

In December, first-time buyers in the area spent an average of £179,080 on their property, according to Land Registry figures.

A 5% deposit on a home costing this much would be £8,950 and raising the 95% mortgage would require a household income of £47,260.

That's based on what housing charity Shelter says is a "typical" loan to income ratio of 3.6 – that is, a mortgage lender will allow a household to borrow 3.6 times their gross income for a home purchase.

Office for National Statistics data reveals that the gross median salary of a full-time employee in Leeds was around £30,270 in 2020.

The median is a measure used to exclude extreme values which could skew the average.