Nationwide analysis reveals the most and least affordable areas for first-time buyers, with house prices ranging from 2.3 to 13.9 times local earnings across Britain
First-time buyers are confronting substantial affordability challenges throughout Britain, with properties in certain areas priced at roughly double the local salary typically, and up to 14 times average earnings in other places, new analysis shows.
Inverclyde in Scotland was pinpointed by Nationwide as the most affordable location for those stepping onto the property ladder, with the average first-time buyer property costing 2.3 times local wages.
Burnley and Hartlepool were also highlighted by Nationwide Building Society as amongst the most affordable spots to get onto the housing ladder, with typical house prices in these areas costing just shy of three times the average local income.
Andrew Harvey, Nationwide’s senior economist, 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.
“Inverclyde includes Greenock and Port Glasgow and is also the cheapest area in Scotland, with average prices around £100,000.
“Burnley and Hartlepool remain the most affordable areas in the North West and North regions respectively.”
The research also examined the least affordable areas. The London borough of Kensington and Chelsea was the least affordable spot in London and Britain, with a property costing 13.9 times local wages typically.
Oxford, Cambridge, York and Cardiff were also identified as particularly unaffordable parts of Britain to get onto the property ladder. Mr Harvey stated: “A 10% deposit on a first-time buyer property is £15,000 or less in (around) 10% of local authorities, whilst in nearly half of areas the average deposit is between £15,000 and £25,000.”
He noted that approximately 70% of local authorities have witnessed an improvement in affordability over the past year.
Nationwide utilised average first-time buyer home prices and local earnings figures for the typical full-time adult worker to perform the calculations.
Adding to the hurdles for hopeful first-time buyers and homeowners, mortgage rates have been surging in recent weeks due to shifting market expectations following the conflict in the Middle East.
Hundreds of mortgage deals have also been pulled from the market as lenders have rushed to make adjustments.
According to financial information website Moneyfacts, the average two-year fixed-rate homeowner mortgage available on the market has increased from 4.83% at the start of March to 5.35%.
The average five-year fixed homeowner mortgage rate has climbed from 4.95% at the beginning of March to 5.39%.
Adam French, head of consumer finance at Moneyfacts, said: “Swap rates, which underpin mortgage pricing, have risen sharply following the decision (by the Bank of England on Thursday) to hold the base rate at 3.75%, with markets interpreting commentary from the Bank of England as leaving the door open to rate rises amid ‘Trumpflation’ fears.
“With two and five-year swaps now sitting at their highest level in more than a year, lenders are once again facing higher funding costs, and this will feed through into mortgage pricing.”
He added: “Whilst a quicker resolution to the conflict in the Middle East could ease pressure on rates, the reality is that a more volatile world is a more expensive world. Even though the most competitive deals will remain below average, anyone looking to buy or remortgage this year needs to prepare for higher costs than previously expected.”
Mary-Lou Press, president of NAEA (National Association of Estate Agents) Propertymark, said Nationwide’s data “highlights a mixed picture for first-time buyers across the country”.
She added: “It is positive to see affordability improving in many areas, with around 70% of local authorities recording progress over the past year, which should help support market activity.
“However, significant regional disparities remain. Whilst 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 create substantial barriers, particularly when it comes to saving for a deposit.”
James Nightingall, from property search service HomeFinder AI, said: “Prime central London boroughs including Kensington and Chelsea are particularly sought-after.
“Many first-time buyers are priced out and are looking in zones three to six for more affordable homes whilst others decide to continue to rent and save up a larger deposit.”
Here are the most budget-friendly areas for first-time buyers in nations or regions, according to Nationwide, with the average house price-to-earnings ratio:
- 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
- Here are the least affordable areas for first-time buyers in nations or regions, according to Nationwide, with the average house price-to-earnings ratio:
- 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
