New research has uncovered the cheapest UK areas to get a mortgage – and three of them are in Lancashire.

RM Mortgage Solutions analysed the monthly mortgage repayments for properties across the UK and found the median monthly rent in each area.

They also revealed where renters will need to budget the largest amount for a mortgage on top of rent and how this amount changes with different deposit ratios.

The findings highlight the change in additional costs when comparing rent prices to the average cost of a mortgage (with a 10 per cent deposit)

One Lancashire town took the number one spot for most affordable areas to purchase a property while others took second and fourth place.

The 10 most affordable areas to purchase a property are:


According to this research, residents in Blackpool are the only people in the country who can purchase a property with a 10% deposit and see mortgage repayments 1.7% lower than the average rent for the area.

Blackpool homeowners can not only invest in their property rather than rent, but they can also reduce their expenditure.

Burnley follows with a small monthly cost increase of 0.3%. Gloucester is the third most affordable area for purchasing a property, with a 6.6% increase.

The mortgage repayments in Preston cause an average increase of 9.3%, compared to renting. Completing the top five areas is Newcastle upon Tyne with a rise of just under 10%.

However, property prices (and monthly mortgage repayments) have risen far above the average rental costs in some UK areas.

The five areas where a 90% LTV mortgage has the largest impact on expenditure versus rent are:

 

  1. London +141.3%
  2. Cambridge +137%
  3. Winchester +112%
  4. Stratford-on-Avon +99.9%
  5. Chichester +98.2%

 

London is the priciest area for renting in the UK, with rent averaging £1,430 per month across all Boroughs. People looking to purchase a property in the capital will also see the largest increase in this monthly expenditure. On average, homebuyers face an increase of 141.3% in rental costs with a 10% deposit or an increase of £2,020 per month.

Richard Moring, Director at RM Mortgage Solutions Ltd, has this to say: “Getting on the property ladder is a major step for anyone. But when doing so, be aware of the change in expenses that you may see.

“Often mortgages are more than the rent you’re currently paying, and you should budget for this and also save up a safety net for any additional maintenance work that may be required to your property.

“5% or 10% deposits are fantastic for getting buyers out of rental properties and into their own homes. But just be aware that a small change in the deposit can massively alter your monthly repayments. If you can, put more into your deposit, or to reduce monthly expenditure, choose a mortgage product with low or no repayment fees so that you can clear your mortgage more quickly.”

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