Rising house prices have added insult onto the many injuries the property market has inflicted on first-time buyers since the start of the pandemic. Mortgages? nearly unobtainable unless you can somehow put together a larger deposit. Stamp duty holiday? It's actually working against first-time-buyers who used to have an advantage over second-steppers.
- Learn to secure the best mortgage rates as part of your house purchase
- Get the latest information on house prices 2020, whether you're buying or selling
And yet, there is some hope for first-time-buyers, according to the latest research from lettings and estate agent Barrows and Forrester. They have analysed current prices, annual changes, and costs compared to the broader averages in each area.
The overall conclusion of the research is surprisingly encouraging. While house prices have risen by 2.9 per cent on average in the last year, first-time-buyers are still paying a lower average house price of £198,513, in comparison with the overall average £238,414. Read on if you want to know where in the UK you'll make the biggest savings on your first home.
1. The areas with the lowest house prices
There still are areas in the UK that are relatively insulated from the skyrocketing house price trend we've seen recently. When it comes to overall affordability, Inverclyde is home to the lowest price paid by first-time buyers at £72,435. East Ayrshire (£74,876), the Western Isles (£76,122) and North Ayrshire (£87,447) are also amongst some of the most affordable areas of Britain for outright house price.
In England, County Durham (£90,488), Tyne and Wear (£121,976), Lancashire (£122,721) and Merseyside (£124,725) are home to some of the lowest prices paid by first-time buyers, while Blaenau Gwent (£95,729), Merthyr Tydfil (£99,995), Rhondda Cynon Taff (£105,380), and Neath Port Talbot (£116,805) are the most affordable markets in Wales.
2. The areas with the biggest house price drops
It's important to stress, for the sake of everyone's sanity, that, although many areas in the UK have seen sharp house price increases since May, 18 areas in Britain have actually seen house price drops or have remained static over the last year. That's actually quite a lot of places to choose from if you're looking for a first home.
The Western Isles (-24.8 per cent), Inverclyde (-12.7 per cent) and East Lothian (-9.3 per cent) seeing the most considerable reductions. All of these areas are in Scotland, which remains one of the most affordable places to live in the UK.
Affordability is shrinking in Wales. Gwynedd (-3.5 per cent) is the only area of Wales to see the average house price drop in the last year. In England, County Durham (-0.5 per cent), Cambridgeshire (-0.4 per cent), Hertfordshire (-0.1 per cent) and Bedfordshire (no change) have remained largely flat.
3. The areas with the biggest discounts for first-time-buyers
If you want to buy in a more mainstream area that, nevertheless, recognises the different purchasing power of first-time buyers, you may be in luck. There are pockets in the property market that do acknowledge the financial strain on first-time buyers with discounts.
When it comes to the most significant first-time-buyer discounts when comparing the average first-time-buyer house price with the wider average in each area, Perth and Kinross are currently the best places to buy your first home. The average house price paid by first-time buyers is £140,886: that's 26.1 per cent more affordable than the wider average of £190,758 in the area.
In England, first-time buyers can find the biggest relative discounts in Surrey (25.3 per cent), Buckinghamshire (25.2 per cent), Herefordshire (23.1 per cent), and Hampshire (21.8 per cent). These aren't cheap areas by any means, but they do, perhaps surprisingly, take into account that people generally can't pay as much for their first home as for their second.
In Wales, Monmouthshire (22.3 per cent), Vale of Glamorgan (16.8 per cent), Flintshire (15.7 per cent) and Anglesey (15.6 per cent) will give first-time buyers the biggest discount. Managing Director of Barrows and Forrester, James Forrester, commented:
'Buying your first home is a huge mile marker in life, and finding the right property can be a daunting process. For many, affordability will be the deciding factor and the price paid by first-time buyers varies dramatically across Britain, with the majority of areas seeing this cost of getting on the ladder increase over the last year.
'However, while Scotland is home to the greatest wealth of first-time buyer affordability, those house hunting at the other end of Britain are unlikely to up sticks and move that far from their desired area.
'The good news is that all but one area of Britain is home to a lower price paid by first-time buyers when compared to the wider market. With this relative discount ranging from around five to 25 per cent.
While first-time buyers may have a location in mind, expanding their search to the surrounding areas could mean a much more affordable property or a more significant saving.'