According to ONS, the average house price in the UK during March 2022 was £278,000. This is a price growth of £24,000 more than the average price in March 2020. Whilst the housing market has seen prices steadily increase in recent years, the easing of restrictions that were implemented because of the pandemic has led to a surge of interest from hopeful buyers, particularly those looking to purchase their first house.
The average age of a first-time buyer in the UK is 34 years old. This has increased over the past few decades, as the average age was just 28 years old in 2007. Many younger people spend their early adult years renting until they are able to save enough to buy their own property. However, there are certain areas in the UK that can provide first-time buyers with more for their money than other areas and can get you on the housing ladder quicker.
Shildon in County Durham has topped the list of most affordable places to live in the UK. The average properties sold in the North East town cost buyers £71,000, which is only 1.1 times the average salary in Shildon. Two other towns in County Durham are also some of the UK’s most affordable places to live. Ferryhill homeowners are expected to pay 1.29 times their salary to buy a property with an average of £80,400 asking price. Peterlee has an average house price of £84,200, which is 1.35 times the average salary in the area.
Rural locations are also popular for first-time buyers who want to get on the property ladder through affordable housing with a bit of extra space. Cumbria, which borders Scotland in North West England, is famed for its beautiful scenery and is considered an up-and-coming area for buyers looking to save money and live in a rural county. The average price paid for property in this first-time buyer hotspot is £210,454.
Where are the most affordable places to buy a house in the UK?
Northern regions tend to have cheaper property prices than anywhere else in the UK. However, many northern residents commute further south for better job opportunities. This means that northern regions tend to have cheaper properties, but homeowners will have a further distance if they want to travel to popular working areas such as London.
Locations such as Leeds, Sheffield and Nottingham are considered first-time buyer hotspots in the UK as the average house prices in each city have dropped in recent years. Leeds City Centre saw a decrease of 4% in the property market between January and April 2021, with the average asking price for a property falling from £166,760 to £159,972.
Sheffield City Center has also seen a 4% decrease in property prices, with the average asking price dropping from an average value of £128,606 to £124,097 between January and April 2021. Nottingham City Centre saw a decrease of 3% from £183,542 to £178,390 during the same period.
Derry (otherwise known as Londonderry) in Northern Ireland is also considered one of the most affordable places to buy a property in the UK. The average house price in the city is £155,917, whilst the average salary is £33,138. This is a 4.7 ratio of house price to earnings. Carlisle and Bradford, Yorkshire and the Humber have an equally low house price to earnings ratio of 4.8. The average house in Carlisle costs £163,232, which is just over four times the cost of the average £34,087 salary. The average property in Bradford, Yorkshire and the Humber costs £164,410, whilst the average salary in the area is £34,219.
Scottish cities are repeatedly rated as the most affordable places to live in the UK. These cities include the likes of Inverness, Aberdeen and Glasgow. Each of these places has house prices that cost an average of five times the average salary in the local area.
Where are the most expensive places to buy a house in the UK?
London is notorious for being one of the most expensive places to live in the country due to the high property prices. The capital is an extremely desirable place to live due to the hub of companies and business opportunities. Consequently, cities and towns that have great transport links to London generally have more expensive properties because of the increased number of commuters.
Kensington has an average house price of £3 million, with Westminster and Chelsea also ranking as some of the most expensive areas to live in London. The Royal Borough of Kensington and Chelsea is also known for being one of the most densely populated areas in the UK.
However, London isn’t the most unaffordable place to live in the UK, despite the expensive property market. Places such as Winchester and Oxford often top the list of least affordable places to live due to the high property prices and the uneven ratio between the average salaries in these locations. for example, property prices in Winchester are an average of 14 times the amount of the average salary in the city. Residents in Oxford can expect to pay over 11 times the cost of their salary on an average property.
Other expensive places for properties in the UK include Virginia Water in Surrey, which has an average property price of £1,436,631. Bath, Chichester and Cornwall’s county town, Truro, are also known for their expensive properties. Most first-time buyers may avoid these areas in favour of nearby towns and villages that have slightly lower property rates.
Brighton and Hove had previously been ranked as the second most expensive place to live in the UK, but has since been overtaken by other cities as the housing market shifts.
What do first-time buyers look for in a property?
Aside from the cost of a property, there are a number of other factors that can impact its appeal to potential first-time buyers. Location is one of the most important factors for any buyer, including both first-time and existing homeowners. Most buyers will base their decision on how close a property is to their workplace, or at least how easy it is to commute. They will also look at the local amenities, including shops, schools and recreational areas.
Following the COVID-19 pandemic, it seems that more and more first-time buyers rate outdoor space as a priority when looking at buying their first property. 33% of first-time buyers consider outdoor space and size as desirable features when they are viewing houses to buy. The size of the house ranked a close second, with 28% of buyers rating this as a priority.
Parking availability, the surrounding area and good transport links are also considered important parts of the decision-making process for individuals looking to buy their first property. The least important aspect for first-time buyers is how the house looks, which was rated by 12% of individuals as their top priority. Surprisingly, the cost of running and maintaining the property was only rated by 14% of first-time buyers as the most important factor in their decision-making process.
One of the aspects deemed least important in the decision-making process of buying a house is “the success of the local housing market”, which was only rated by 2% of first-time buyers as their top priority. Other low scorers include the cost of home insurance for the property, being close to childcare and if the property needs renovating.
How much of a deposit should I put down on a house?
The average deposit that most buyers put down on a property is between 10% and 20% of the asking price. Whilst the minimum deposit is 5%, there are many benefits to putting down a larger sum. Larger mortgage deposits mean that you have smaller monthly repayments as the loan is smaller. Mortgage lenders also give lower interest rates to buyers who put down a larger deposit because there is less risk involved, which is a bonus as many mortgages are subject to slowly rising interest rates.
As a first-time buyer, you may wish to put down a larger deposit as you enter the housing market because it sets you up in good stead for lower mortgage repayments. However, it’s important to remember to save enough for other property fees, such as Stamp Duty, Land Registry and conveyancing.
There are various things that prospective first-time buyers need to consider when deciding on how much they should put down as a deposit on a property. This includes other financial responsibilities such as utility bills and student loan repayments, as you need to make sure that you can afford mortgage payments along with other monthly bills.
The average deposit that first-time buyers pay varies across the different regions of the country. London has the highest average of 27% and the North West has the lowest average with 19%. The majority of other regions have an average deposit rate of 20%, including areas such as the South East and the West Midlands.
Although many regions see first-time buyers put down a deposit of 20%, this will result in a varying amount due to the different average house prices in the regions. For example, a 20% deposit in the South-East would be an average of £64,910, based on an average house price of £321,131. This is over £20,000 less than a 20% deposit in the West Midlands, which is an average of £42,062 on an average house price of £205,246.
Below is a table that shows the average house prices and deposits that first-time buyers put down on properties across the different regions in the UK.
|Region||Average house price||Average deposit (£)||Average deposit (%)|
|Yorkshire & Humber||£168,046||£33,313||20%|