First-time buyers across Britain are grappling with vast affordability disparities, with property prices ranging from twice the local salary to a staggering 14 times average incomes in some areas, new analysis reveals.
The Nationwide Building Society’s research highlights the significant hurdles facing those trying to get onto the property ladder.
Inverclyde in Scotland emerges as the most accessible location, where the average first-time buyer home costs approximately 2.3 times local earnings.
Similarly, Burnley and Hartlepool were identified as highly affordable, with typical property prices in these areas just under three times the average local wage.
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 report also looked at the least affordable locations. The London borough of Kensington and Chelsea was the least affordable location in London and Britain, with a home costing 13.9 times local earnings typically.
Oxford, Cambridge, York and Cardiff were also identified as particularly unaffordable pockets of Britain to climb onto the property ladder.
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Mr Harvey said: “A 10% deposit on a first-time buyer property is £15,000 or less in (around) 10% of local authorities, while in nearly half of areas the average deposit is between £15,000 and £25,000.”
He said around 70% of local authorities have seen an improvement in affordability over the last year.
Nationwide used average first-time buyer home prices and local earnings figures for average adult full-time worker to make the calculations.
In a further challenge to aspiring first-time buyers and homeowners, mortgage rates have been jumping in recent weeks amid changing market expectations following the conflict in the Middle East.
Hundreds of mortgage deals have also been withdrawn from the market as lenders have scrambled to make adjustments.
According to financial information website Moneyfacts, the average two-year fixed-rate homeowner mortgage on the market has risen from 4.83% at the start of March to 5.35%.
The average five-year fixed homeowner mortgage rate has risen from 4.95% at the start 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: “While 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. While 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.”
Most affordable areas
Here are the most affordable 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
Least affordable areas
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