The most (and least) affordable locations for first-time buyers

What do Bradford, Blackpool and Stoke-on-Trent have in common? And why should first-time buyers avoid Bath, Oxford and London?

The answers lie in the results of a new study that analyzed the most affordable – and also the least affordable – places for first-time buyers to buy property in England.

the new affordability index by online mortgage broker Mojo Mortgages, Bradford, Blackpool and Stoke-on-Trent were among the top three most affordable places to access the real estate ladder, after factoring in house prices, mortgage payments, salary annual average and net monthly salary.

Meanwhile, you guessed it, Oxford, Bath, and London emerged as the least affordable.

Mojo launched the index to coincide with the launch of the government program First Homes which was designed to help first time buyers in England move up the real estate ladder.

The initiative aims to help first-time buyers and key workers access the property ladder in their local areas who would otherwise have had to move to another city to afford their first home.

First Home properties will receive a discount of at least 30% of the original market value to allow for more affordable deposits and mortgages with prices capped at a maximum of £ 250,000 (£ 420,000 in the Greater London).

This discount will apply to the life of the property, meaning that the same discount percentage will apply when the home is resold in the future.

Prices in more detail

Based on the average monthly mortgage payment as a percentage of income, Oxford was the least affordable place in England for first-time buyers, according to Mojo.

Here, the average monthly mortgage repayment represents 49.37% of a couple’s take-home pay. This is based on an average property price in the city of £ 540,005 and an average annual salary of £ 31,232.

Bath (47.65%) and London (47.12%) followed closely, highlighting the difficulty of gaining access to the real estate scale in these areas. However, Mojo noted that there were gaps between the 32 London boroughs in the capital.

The ten least affordable areas in England based on mortgage as a percentage of income were:

Oxford (49.37%)

Bath (47.65%)

London (47.12%)

Reading (38.98%)

Poole (38.72%)

Cambridge (38.49%)

Brighton (37.19%)

Quagmire (36.68%)

Cheltenham (36.38%)

Exeter (35.03%)

The most affordable

In contrast, Bradford was the most affordable for first-time buyers. With an average house price of £ 145,981 and an average annual salary of £ 28,790, this was equivalent to 14.30% in terms of monthly mortgage payments as a percentage of income – the lowest in England.

Blackpool (15.94%) and Stoke-on-Trent (17.35%) followed next with the ten most affordable areas for first-time buyers as follows:

Bradford (14.30%)

Blackpool (15.94%)

Stoke-on-Trent (17.35%)

Sunderland (17.56%)

Middlesbrough (17.70%)

shell (17.72%)

Carlisle (17.82%)

Durham (18.10%)

Liverpool (18.56%)

Bolt (19.19%)

Mojo points out that regardless of location, the First Homes program could make a significant difference in a first-time home’s monthly spending once up the real estate ladder in terms of mortgage payments and savings for that large deposit. .

For example, people in London who buy property under the program can expect to pay an average of £ 766 less per month on their mortgage payments, bringing their spending percentage of income from 42.17% to 32.97% – a significant saving.

However, before considering your mortgage options, it’s important to establish how potential repayments fit into your monthly budget.

Nisha Vaidya, Mortgage Expert at argent.co.uk, explained, “A home is one of the most important purchases you will make and it can be difficult to figure out how much you can afford.

“Many factors, such as your salary, regular expenses, and your debt-to-income ratio, will impact whether a home is within your reach.

“A good rule of thumb is to allocate no more than 35% of your gross income to your monthly mortgage payments. Any more than that and you could become “house poor” where you own a house but run out of money to do other important things like save money or go on vacation. “

Cassie Stephenson

Cassie Stephenson, Director of Mortgages at Mojo Mortgages, added: “While it is of course important to remember that the over 30% discount will apply throughout the life of the property and will apply when you finally sell for the first time , a First Homes program property is always worth considering, regardless of optional location for first-time buyers looking to step up the property ladder.

“Available savings – including allowing first-time homebuyers to access higher LTV mortgages through reduced deposits – could also mean better access to lower interest rates and better overall savings.” throughout the life of a mortgage.

“Plus, of course, buying a home is an important long-term investment in your financial future, rather than lining the pockets of a homeowner.

“We are delighted to see how this new program will develop over the next few months as new properties and developments continue to emerge across England.”