What chance do first time buyers really have when a royal couple looking for a home could only qualify for a mortgage of £115,000?
If soon-to-be-married Prince William and Kate Middleton had to turn up for an appointment
with their bank or building society manager, all they could offer as financial security for a
mortgage would be the Prince’s £37,170 a year salary as an RAF helicopter pilot.
Kate Middleton gave up her job with her father’s company earlier in the year and is currently
unemployed.
The average income multiple applied to the Prince’s salary – assuming he has no other regular
outgoings like car loans or credit card debts – is 3.12, according to the latest figures from the
Council of Mortgage Lenders.
That gives him a maximum mortgage of £115,970.
If the couple then opted for a 80% loan-to-value product, that would mean they could look for
a property worth around £144,965.
According to the CML, 10,500 first time borrowers were advanced £1.2 billion in January
based on the same formula calculating Prince William’s home buying power.
The property value is a good way below the average UK property price of around £165,000
and certainly excludes the couple from buying a home in any fashionable part of London – and
probably most unfashionable ones as well.
If they want to live in Windsor, the choice is between two one bedroom flats – one costing
£149,950 and the other a permanently sited mobile home for £120,000.
Even living near the Prince’s work at RAF Valley, Anglesey, would be a struggle on the
couple’s budget.
House prices start at £150,000 for a choice of flats and houses, so the couple would have to
negotiate a deal with a seller willing to drop their price.
Of course, the royal couple will not have to fend for themselves – they have rich families to fall
back on.
The figures do highlight the problems other first time buyers have finding a home – even if
they can persuade a lender to give them a mortgage, the number of suitable homes available
in their price range is slender.
