The Ability to Live and Buy a House in the UK in 2016
This essay examines the effects of wage levels related to the ability to live and purchase a house in the UK in 2016.
It examines the working week, range of wages, lowest, average, highest, tax levels, range of take home wages, the minimum Income Standard (MIS) for the UK in 2015, the average cost of new build and pre-owned homes and their associated mortgage repayments.
Conclusions are then drawn.
Working Week in the UK.
365 day working year to allow for salaried holiday time and working time.
40 hours over a 5 day week.
Lowest Wage in the UK
£3.40 for apprentices per hour.
Source: https://www.gov.uk/national-minimum-wage-rates
Total possible wage before tax
£9,928 per year. After taxes. £9,703.84. £808.65 per month.
Source: http://www.thesalarycalculator.co.uk/salary.php
Average Wage in the UK
Average Salary £27,600 per year.
Source: https://www.incometaxcalculator.org.uk/average-salary-uk.php
£21,935.20 after taxes per year. £1827.93 per month.
Source: http://www.icalculator.info/salary_illustration/27600.html
Highest Wage in the UK
Average Salary: £128,231 per year. After taxes. £77,441.18. £6543 per month.
Source: https://www.theguardian.com/money/2015/dec/02/highest-paid-jobs-2015
Source: http://www.thesalarycalculator.co.uk/salary.php
Range of take home wages in UK.
£9,703.84 per year to £77,441.18 income per person.
£26.59 per day to £212.17 per day disposable income.
Minimum Income Standard (MIS) for the UK in 2015
‘In 2015, single people need to earn at least £17,100 a year before tax to achieve MIS. Couples with two children need to earn at least £20,000 each.’
Source: https://www.jrf.org.uk/report/minimum-income-standard-uk-2015
Source: http://www.minimumincome.org.uk/results (£17,311)
A single person needs to earn £14,795.20 a year after tax to achieve MIS.
Couples with two children need to earn £16,767.20 a year after tax to achieve MIS.
Source: http://www.icalculator.info/salary_illustration/17100.html
Source: http://www.icalculator.info/salary_illustration/20000.html
The lowest wage level before tax is therefore only 58% of the proposed minimum income standard.
Average cost of a new UK house.
£256,000
Source:http://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/2015-04-14
Repayments on a new UK house.
£250,000 over 25 years repayments at 3% interest rate including mortgage fees on repayment mortgage £1,185 per month £355,613 total repayment.
Source: http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#results
Average cost of a Pre-Owned UK house.
£256,000
Source: http://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/2015-04-14
£250,000 over 25 years repayments at 3% interest rate including mortgage fees on repayment mortgage £1,185 per month £355,613 total repayment.
Source: http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#results
The lowest wage level is therefore unable to consider purchasing a house.
The average wage level must commit 65% of their monthly take home pay to paying off the mortgage.
The highest wage earner must commit 18% of their monthly take home pay to paying off the mortgage.
Conclusions
The minimum wage earner has only 58% of the proposed minimum income standard to live.
The lowest wage level is therefore unable to consider purchasing a house.
The average wage earner is above the minimum level of earning to live.
The average wage level must commit 65% of their monthly take home pay to paying off a mortgage if they try to buy a £250,000 pound house.
The highest wage earner is above the minimum level of earning to live.
The highest wage level must commit 18% of their monthly take home pay to paying off a mortgage if they try to buy a £250,000 pound house.
Parts of the UK society in 2016 exist below the ability to survive.
All of the UK society has difficulty in paying for a house at the wage level they earn.
Ian K Whittaker
My websites:
https://sites.google.com/site/architecturearticles
Email: iankwhittaker@gmail.com
11/11/2016
14/10/2020
574 words over 2 page.