Rightmove reveals cheapest and dearest places for first time buyers

New analysis from Rightmove claims to reveal the cheapest UK city for a first time buyers to get on the property ladder. 

It’s Bradford where the average asking price for a typical first-time buyer type property is £104,643 with the average monthly mortgage payment now £521 per month.

The data analysed the average monthly mortgage payment of a typical first-time buyer type property boasting two bedrooms or fewer, and the equivalent monthly rent, in cities across Great Britain. The data assumes first-time buyers are taking out a five-year fixed, 90 per cent Loan to Value mortgage at the best-buy rate of 4.45 per cent, spread over 25 years.

Carlisle is the second cheapest city to be a first-time buyer, with an average monthly mortgage payment of £522, followed by Aberdeen (£528) and Hull (£532).

St Albans is the most expensive city to be a first-time buyer excluding London, with average monthly mortgage payments for a first-time buyer type home now £1,958, followed by Bath (£1,765) and Cambridge (£1,763).

It’s cheaper to pay a monthly mortgage on a first-time buyer type home than rent in half of cities for those who are able to save a 10 per cent deposit. This increases to two-thirds of cities if first-time buyers can save up a 15 per cent deposit, therefore reducing their monthly payments, with many parts of Britain seeing record rents and a significant gap between demand and supply of rental homes.

First-time buyers in Glasgow make the biggest savings in cash terms by getting on the ladder, with the average monthly mortgage payment for a first home being £215 per month cheaper the average rent, while first-time buyers in St. Albans see the biggest increase in monthly payments when purchasing a first home of £525 compared to the equivalent rent.

Across Britain, a typical first-time buyer home is now a record £226,399, and the best-buy rate on a five-year fixed 90 per cent LTV mortgage is now 4.45 per cent - up from 2.79 per cent this time last year.

Despite these price increases, the average mortgage payment on a first-time buyer property is now £1,127 per month, only just edging the average asking rent of £1,120 per month.

Rightmove’s Tim Bannister comments: “For those who are able to save up the deposit, it’s still cheaper to pay off a mortgage as a first-time buyer in many areas than pay the equivalent in monthly rent, despite prices reaching a new record at a national level and mortgage rates rising. 

“It highlights how frenetic the rental market has been for a long time now, with many areas continuing to see record rents and fierce competition between tenants for the properties available. It helps to explain why we’re seeing such determination from first-time buyers to continue to get onto the ladder despite the economic headwinds that they face, and why we’re seeing buyers increasingly return to cities while a bigger proportion of renters are looking to move away.”