The most and least affordable locations for first-time buyers in UK
New analysis reveals that first-time homebuyers across Britain are grappling with huge price disparities, with property prices ranging from twice the local wage to a staggering 14 times the average income in some areas.
Nationwide Building Society’s research highlights the significant hurdles faced by those trying to get on the property ladder.
Inverclyde in Scotland emerges as the most accessible location, with the average first-time homebuyer costing around 2.3 times local earnings.
Similarly, Burnley and Hartlepool were found to be highly affordable, with typical property prices in these areas being just under three times the average local salary.
Andrew Harvey, senior economist at Nationwide, said: “Inverclyde in Scotland is the most affordable local authority in Great Britain, with average first-time buyer house prices just 2.3 times average earnings in the area.
“It includes Inverclyde, Greenock and the Port of Glasgow and is also the cheapest part of Scotland, with prices averaging around £100,000.
“Burnley and Hartlepool remain the most affordable areas in the North West and North respectively.”
The report also looked at the least affordable places. The London boroughs of Kensington and Chelsea were the least affordable place in London and Britain, with the cost of a house typically 13.9 times local earnings.
Oxford, Cambridge, York and Cardiff were also identified as particularly affordable pockets of getting onto Britain’s property ladder.
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Mr Harvey said: “A 10% deposit for a first-time buyer property is £15,000 or less in (about) 10% of local authorities, while in almost half of the areas the average deposit is between £15,000 and £25,000.”
It said around 70% of local authorities had seen an improvement in affordability in the past year.
Nationwide average first-time buyer house prices and local earnings figures for the average adult full-time worker were used to make the calculations.
Another challenge for those considering buying a home for the first time and those who want to own a home is that mortgage rates have increased rapidly in recent weeks due to changing market expectations following the conflict in the Middle East.
Hundreds of mortgage deals have also been pulled from the market as lenders struggle to make adjustments.
The average two-year fixed-rate homeowners mortgage on the market rose to 5.35% from 4.83% at the beginning of March, according to financial information site Moneyfacts.
The average five-year fixed homeowners mortgage rate rose to 5.39% from 4.95% in early March.
Adam French, Head of Consumer Finance at Moneyfacts, said: “Swap rates, which underpin mortgage pricing, rose sharply following the Bank of England’s decision (on Thursday) to keep the base rate at 3.75%, with markets interpreting the Bank of England’s comment as an open door to rate rises amid ‘Trumpflation’ fears.”
“With two- and five-year swaps at their highest level in more than a year, lenders will once again face higher funding costs, which will be reflected in mortgage pricing.”
He added: “A quicker resolution of the conflict in the Middle East could ease pressure on interest rates, but the reality is that a more volatile world is a more expensive world. Anyone looking to buy or remortgage this year should be prepared for higher costs than previously expected, although the most competitive deals will be below average.”
NAEA (National Association of Realtors) Propertymark president Mary-Lou Press said Nationwide’s data “reveals a mixed picture for first-time buyers across the country.”
He added: “It is positive to see affordability improving in many areas, with around 70% of local authorities making progress last year, which will help support market activity.
“However, significant regional disparities remain. While some parts of the country are becoming more accessible to buyers, high house prices in areas such as London and the South East continue to pose significant barriers, particularly when it comes to saving for deposits.”
James Nightingall, of property search service HomeFinder AI, said: “Main central London boroughs, including Kensington and Chelsea, are particularly sought after.
“Many first-time homebuyers are being priced out and are looking at zones three to six for more affordable homes, while others are deciding to continue renting and save for a larger deposit.”
The most affordable areas
According to Nationwide, the most affordable areas for first-time homebuyers in the country or region by average house price/earnings ratio are:
Scotland, Inverclyde, 2.3
North West, Burnley, 2.8
North, Hartlepool, 2.9
Yorkshire, Kingston upon Hull, 3.0
Wales, Merthyr Tydfil, 3.3
West Midlands, Stoke-on-Trent, 3.4
East Midlands, West Lindsey, 3.7
East Anglia, Great Yarmouth, 4.3
Outer South East, Gosport, 4.7
Outer Metropolitan, Surrey Heath, 4.8
South West, Swindon, 4.8
London, Bromley, 6.2
Cheapest areas
According to Nationwide, the least affordable areas for first-time homebuyers in the country or region, based on the average house price/earnings ratio, are:
London, Kensington and Chelsea, 13.9
Outer South East, Oxford, 8.0
East Anglia, Cambridge, 7.3
Outer Metropolitan, Spelthorne, 7.0
South West, South Hams, 6.9
East Midlands, Derbyshire Dales, 5.7
West Midlands, Stratford-on-Avon, 5.6
North West, Trafford, 5.5
Yorkshire, York, 5.4
Wales, Cardiff, 5.3
Scotland, Midlothian, 4.9
North, Westmorland and Furness, 4.1
