Which Degrees Help Graduates Buy A Home Straight Out Of University?
31st July 2019
Back in December we discovered that 25% of millennials (aged 18-34) chose a career that would help them quickly climb the property ladder.
This was in contrast to previous generations. Just 9% of 35-54 year-olds and 3% of people over 55 told us they were influenced by earnings potential.
But as first-time buyers in major UK cities now need an average income of at least £53,000 to get on the property ladder (as of December 2018), this new trend might not come as a complete surprise.
So you might be wondering, which careers will help you get on the housing ladder sooner?
Now, having carried out new research, we can reveal the university degrees with the highest immediate earnings potential.
Dentists have plenty to smile about
It turns out, those studying dentistry at university have the greatest choice when it comes to getting onto the property ladder during their first year of work.
The typical starting salary of a newly qualified dentist is £34,840(1), meaning they could borrow a mortgage of up to £139,360.
Provided they’ve managed to save a 5% deposit (around £7,300), they could afford a home worth up to £146,695.(2)
That’s enough to afford a home in 172 different towns and cities across England, Scotland, and Wales,(3) including:
Fairbourne in the Welsh county of Gwynedd (£146,499 average house price)(4)
Maybole in Scotland (£146,243 average house price)(5)
Knottingley in West Yorkshire (£146,224 average house price)(6)
However, a dentistry degree does take five years to complete, which can have a bigger impact on student loan repayments and affordability.
Top 10 degrees
If peering into people’s mouths for a living isn’t your thing, you could also consider a degree in one of the following fields.
Bottom 10 degrees
But of course, not all degrees will immediately put you in good stead to buy a home straight out of university.
What other support is there?
If you’re set on a career in the creative arts or psychology, and you’re keen to buy your own home as soon as possible, there are several options to consider.
You could increase the amount you have to spend with a gifted deposit from a family member.
You could look for homes being sold under the Shared Ownership government scheme.
You could buy with a partner or club together with friends.
If you plan ahead, you could also use the Help to Buy or Lifetime ISA to boost your savings.
The reality is that most graduates won’t earn enough in their first job to borrow enough of a mortgage to get onto the property ladder, let alone save for a deposit.
We think young first-time buyers are simply being let down by the industry.
As we’ve mentioned, there are government-backed schemes available. But more could be done, such as mortgage lenders considering salary projections when calculating what the buyer can afford.
At Trussle, we’re using our data to design personalised mortgage products, specifically for underserved groups like young first-time buyers. So stay tuned for further updates.
Trussle analysed 70 average graduate starting salaries as provided by Save the Student.
This data was collated in June 2019 and represents average figures collated from multiple sources, including HESA, Office for National Statistics, Bestcourse4me, Graduate Recruitment Bureau, CV Library and surveys from Save the Student.
Salaries were compared using Zoopla’s UK House prices & values on the 26th of July 2019, this assessed 1,487 UK towns and cities.
As part of our calculations, we’ve used a 4x income mortgage borrowing as that’s more common with a 5% deposit.
(2) Calculation: Average grad salary for Dentistry is £34,840. Mortgage is 4x Average Salary = £139,360. House Price = £146,695. Deposit (5% of house price) = £7,337.74
(3) Trussle compared average house prices in each of the 1,487 separate UK towns and cities available to view on the Zoopla website. There are 172 areas with average prices less than £146,695
(4) https://www.zoopla.co.uk/house-prices/browse/gwynedd/ (Fairbourne - Zed Index Price)