It's not so bad for First Time Buyers as affordability improves

No less than 56 per cent of properties across the UK are in areas that are affordable for first time buyers according to an analysis completed by Post Office Money. 

The research, based on data from the Office for National Statistics, examines the affordability for first time buyers of over 80 locations across the UK.

While house price growth has continued, in the last year it has stagnated to an increase of just 0.9 per cent on average across the UK, with the typical home costing £282,713. 

Post Office Money says that at the same time first-time buyer household incomes across the UK increased by 1.2 per cent to £48,289.

It says this means the average house price still sits at 5.85 times the average first time buyer income: however, the research has uncovered many affordable locations across the country for FTBs to explore.

Affordability peaks in Blackpool where the average property price is £110,000, compared to the average FTB household income in the North West of £40,053, meaning 100 per cent of properties in the area are deemed affordable to new homeowners. 

Lincoln and Hull were also among the UK’s ‘affordable hotspots’, both having 100 per cent of properties in areas considered affordable to FTBs.

In the last year, Rotherham has seen the biggest shift in affordability for FTBs. While the number of affordable properties has shrunk by a fifth, some 79 per cent of neighbourhoods in the city are still affordable for the average FTB’s budget.

Meanwhile, prospective house hunters in Ipswich have seen the most opportunity over the course of the last year, with the biggest increase in the number of properties in areas affordable to FTBs - a six per cent rise to 88 per cent.  

This is a result of the trend for falling house prices in the South of England, the first time prices have fallen in the region since the last recession in 2009. This has been attributed to a number of economic factors including Brexit uncertainty.

On the whole, popular commuter hubs in the South continue to make up the majority of least affordable locations for FTBs in the UK.

Oxford ranks as the least affordable commuter location for new homeowners, with average property prices reaching £392,500 and with no properties currently in areas considered affordable to FTBs.

However, one of last year’s least affordable locations - commuter hub Reading - has seen a six per cent rise in the number of properties in the region which are affordable for FTBs. The area had no properties in areas considered affordable in the region in 2017, but rising wages in the South East coupled with lower house prices in certain areas has opened up part of the city to new homeowners. 

Similarly, locations within a short distance of Manchester – such as Wigan and Oldham – are some of the UK’s most affordable areas for FTB commuters at 90 per cent and 88 per cent affordability respectively.