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Junior Doctors could Struggle to Buy a Home even with a Deposit

Many junior doctors study hard and work even harder for years to achieve their dreams, and owning a home might be the last stop on many young people’s road to success. Unfortunately, these days, attaining home ownership might not be as straightforward as it used to be.

This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Over the last two decades, house prices have increased by a staggering 173%, according to research from the Institute of Fiscal Studies.

However, over that same period, the average salary in England has only risen by a mere 19%. This disparity has caused home ownership in people aged 25 to 34 to plummet 20% – from 55% in 1997 to 35% in 2017. It’s clear that inflated property prices have made it extremely difficult for young people to save for a deposit.

How long do you need to save for a house deposit?

As of 2016, about half of young would-be homeowners needed to save over six months of their post-tax income for the standard 10% deposit for a reasonably priced home in an affordable area. In 1996, the same circumstances would have only needed one month’s worth of saving. Coupled with the fact that many lenders have increased the scrutiny around mortgage lending, requiring proof that repayments could be made in the event of extreme interest rate hikes, it’s no wonder young people are having a hard time getting on the property ladder.

When the study first began, over 90% of the coveted age group would be able to afford a home in their desired area with a 10% deposit and a loan of 4.5 times their income. In London — an understandably challenging market — only one third of young adults would be able to afford even the most economically competitive homes in their target areas. And in England as a whole, approximately 40% of 35 to 34 year olds would be priced out of homes, even if they scraped the bottom of the barrel.

It’s not all doom and gloom

It’s important to remember that while purchasing a home might have more hurdles nowadays compared to 20 years ago, it’s not completely out of the question. Working with an experienced independent mortgage broker, and having a solid financial plan in place as early as possible are key to junior doctors understanding their options for home ownership. If you’re planning to buy now or sometime in the future, get in touch today.

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Dental & Medical Financial Services have been helping doctors and dentists with finding low-cost mortgages for your home and investment properties for over 25 years. Call Chris to discuss your options.

Tel: 01403 780 770


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