BBC Housing Calculator – Where Can I Afford to Live?

BBC housing calculator

Where can you afford to live in the UK? The BBC housing calculator gives you some pointers

Living in many parts of the UK is unaffordable according to the BBC housing calculator. It identifies that at least a third of the UK is too expensive for renters and home buyers.

The Resolution Foundation recently concluded that a third of the UK’s rental properties are off limits to lower income working families.

However, not everyone believes that the report’s conclusions are correct. Describing the report as “alarmist,” ex-Housing Minister Mark Prisk said that rents have fallen in real terms.

The BBC has produced a housing calculator to help work out where you can afford to live. The tool has already received a lot of interest and has been ‘promoted’ extensively on BBC television news.

BBC Housing Calculator

  • Question: Is it cheaper to rent or buy a house?
  • Answer: Who knows, it depends on some variables, try the housing calculator

To use the service some variables need entering into the BBC’s home calculator tool, for example:-

  1. Do you want to rent or buy a property?
  2. How many bedrooms do you need?
  3. What’s the budget level of the local housing market that you wish to consider – cheaper, mid-price or more expensive in the home market?
  4. And how much you can budget for a monthly mortgage or rental payments.

Example

Data entered into the housing calculator:

  1. Buy a property with 20% deposit
  2. I want a three bedroom property
  3. Cheaper end of the local market
  4. Budget of £600 per month

Our result:

For the entry above, only 45% of the UK is affordable.

It seems that the need for higher deposits has priced out many home buyers from owning their home (at least for now). Demand for private renting and also rents have gone up. In some parts of the country renting is more expensive than buying a house (assuming a mortgage of 80%).

BBC home prices calculator assumptions

The ‘affordability’ calculation is dependent on the default financial information entered for home prices (actual sold prices) and house valuations (estimates or ‘best guesses’ by RICS Valuers).

The house prices data programmed into the housing calculator tool to work out mortgage costings taken from Land Registry sales information (property price index data).

The house valuation data for the tool compiled from mortgage surveyors acting for lenders/banks (known as the red book).

Bigger deposits increasingly required

Payment figures/rates quoted from the BBC housing calculator are worked out from Bank of England published rates but are apparently only relevant for the first couple of years of the mortgage/loan.

95% mortgages are nigh on impossible to get, so the assumptions are that you will need to find a least a 10% deposit.

Rental levels calculated concerning monthly rents charged by Landlords, which ‘Homelet’ provides on its website.

Use the calculator by visiting the BBC internet site; there is no need to register or enter any personal information.

BBC House Price and Mortgage Calculators.

The BBC also provides information on UK house prices for the period January – March 2013 and a mortgage calculator to help research house prices and plan your finances when taking out a mortgage.