When it comes to buying a property, UK homebuyers may rely predominately on mortgages and cash payments, but their knowledge towards other financial products is limited, new research by Market Financial Solutions (MFS) has revealed.
The bridging lender commissioned an independent, nationally representative survey among more than 2,000 UK adults to uncover just how Brits have been financing their property purchases. Of those who have bought a property since 2007, 42% identified as cash buyers while a further 52% said they had used a mortgage or re-mortgage.
Taking into account the rise of the UK’s alternative finance industry – currently worth over £4.6 billion – the research also revealed a noticeable uptake in products outside of mainstream loans. Nearly one in five (19%) homeowners said they had used a form of alternative finance, ranging from crowdfunding to mezzanine finance and unregulated loans, with this figure rising to 29% among respondents aged between 18 and 34. Meanwhile, 13% of homebuyers said they had used a bridging loan – this number increased to 21% for those who were investing in a second home.
Deciding on how to finance a property purchase can seem overwhelming given the number of loans and products currently available in the UK. As a result, 37% of homebuyers have relied on a broker to help them find a financial product best suited to their needs.
However, MFS’s research also showed that the reliance on mortgages and cash payments was partly due to a lack of knowledge surrounding other available finance options. Reflecting the competitive nature of the country’s property market, nearly a quarter (24%) of buyers said they would have liked to have considered other financial products but feared they would lose out on their property purchase if they delayed their credit decision. Delving into awareness of specific alternative finance products, nearly half (49%) did not have a strong enough understanding of bridging loans or the situations in which they can be used.
Paresh Raja, CEO of MFS, commented on the findings: “Mortgages have long been the go-to method for financing a house purchase in the UK. But over the past decade, a range of new alternative finance products has arisen to give buyers different options that might be better suited to their needs. However, today’s research demonstrates that there remains a lack of understanding about what these options are and how to use them.
“From crowdfunding platforms to raise a deposit, through to bridging loans to buy a property at auction, there are many opportunities now accessible for those needing to access credit, and to remain reliant on the mortgage market could restrict an individual’s ability to get the funds they need. Indeed, in the UK’s competitive property market, it is essential that buyers are aware of the financial products they can choose from, in turn putting themselves in the best position to progress with a purchase quickly and efficiently.”
(Source: Market Financial Solutions)
Property prices across the world are soaring, with figures in Sydney, Australia reaching new heights as the median house price hits an eye-watering $1.18 million. But, how much house could the average individual buy in different cities across the world?
The current climate in the property sector is a bleak one; house prices are climbing to the highest prices ever recorded, with Australian house price growth surging to a seven-year high. When calculating how much Australian’s can afford, the average salary of 80,278 AUD, a typical loan-to-income ratio of 4.5 times the salary and the average price per foot of property show that 509 sq ft is the biggest size of property average Aussie’s can afford in Sydney. But, with the opportunity to move to bigger and better properties in far-flung cities across the world, would you up-and-go for extra square footage?
Shuffle the interactive piece to view highest to lowest sq ft, lowest to high sq ft and all of the cities included sorted A-Z.
Top 10 biggest property locations
These are the cities where Aussie’s can buy the biggest properties:
- Cairo, Egypt. 4,883 sq ft
- Kingston, Jamaica. 2,882 sq ft
- Marrakech, Morocco. 2,610 sq ft
- Kuala Lumpur, Malaysia. 2,213 sq ft
- Mexico City, Mexico. 2,186 sq ft
- Trinidad, Trinidad. 1,734 sq ft
- Budapest, Hungary. 1,261 sq ft
- Lisbon, Portugal. 1,178 sq ft
- Adelaide, Australia. 1,093 sq ft
- Athens, Greece. 1,053 sq ft
Interestingly, Adelaide takes the 9th spot as the city where Aussie’s can afford the biggest properties with their salary. Other Australian cities featured on the ‘How much can you buy?’ list includes Perth, who take the 14th spot with 838 sq ft, Brisbane at 15th with 727 sq ft and Melbourne, just a few places behind at 18th with 608 sq ft.
Top 10 smallest (most expensive) property locations
These are the cities where the smallest properties are that the average Aussie salary, of 80,278 AUD, can afford to purchase:
- Monaco, Monaco. 67 sq ft
- London, UK. 117 sq ft
- Hong Kong, Hong Kong. 154 sq ft
- Paris, France. 234 sq ft
- New York, US. 235 sq ft
- Tokyo, Japan. 248 sq ft
- Moscow, Russia. 252 sq ft
- Mumbai, India. 261 sq ft
- Vienna, Austria. 277 sq ft
- Singapore, Singapore. 294 sq ft
Monaco is the most expensive city in the world for Australian’s to buy a home, with most only being able to afford a measly 67 sq ft of property. It may come as a surprise that London, UK takes the second spot as the most expensive city on the list to buy a property with the average Australian only being able to afford 117 sq ft of property in the English capital. Other heavily populated cities make up the rest of the top 5 list and include Hong Kong, Paris and New York.
Just how big are we talking?
To put square footage into perspective, a standard double bed is 28.1 sq ft. This means that in Monaco you can afford a property the equivalent size of 2.3 double beds on the average Australian salary, crazy right? If we apply the same logic to London, that’s just over four double-beds-worth of property on the same salary.
At the other end of the scale, to purchase a 4,883 sq ft property in Cairo, Egypt would be equivalent of 173.8 double beds.
(Source: Assured Removalists)
