Attention potential property investors: new research has spotlighted some interesting locations you might want to examine. Hotspots such as Kingston-upon-Hull, Middlesbrough, and Neath Port Talbot are presently attracting first-time buyers.
Emerging Favourites for First-Time Home Buyers
The surge of interest in these regions from first-time home buyers stems primarily from vastly more affordable property prices than the national average. In contrast to the overall British first-time buyer’s typical expenditure of £288,030, properties in these areas fetch close to £156,000.
City living can be exhilarating, but high property prices such a setting often entails mean that around 60% of first-time home buyers are prepared to relocate elsewhere in the country, as per information provided by Halifax. Approximately 40% of the potential buyers in the age group of 18 to 34 are exploring these burgeoning hubs, with the search sometimes stretching farther from their current places of work, friends, or family.
Halifax Highlights Hull
The recent trend has pushed Kingston-upon-Hull, the 2017 capital of culture, to notable recognition. Halifax names Kingston-upon-Hull as an ideal location for first-home buyers due to the average property prices being 23% lower than in surrounding regions. A whopping £1.5 billion has been invested in various regeneration projects over the last decade, with elaborate plans to transfigure its ports into globally recognized tourist destinations.
Similarly, Middlesbrough, Neath Port Talbot and Derry City and Strabane have been identified as affordable regions where first-time buyers can expect to pay between £156,761 and £160,636 for a home. The research cites the UK-wide scheme intended to accelerate growth as a pivotal reason for Middlesbrough’s growth.
The Rest of the Top Ten
Scottish town Falkirk also makes it to the top four, with prices averaging around £165,511, 12% less than elsewhere in the region. Coastal towns Ipswich and Eastbourne are also featured in the top ten list, with the latter seeing typical first-time buyer prices around £253,744 – 29% lower than the rest of the South East.
Halifax’s research underscores a large disparity in the UK’s first-time buyer property prices, with a difference ranging from approximately £112,112 in Inverclyde to a jaw-dropping £682,981 in Westminster, London.
Considerations for First-Time Buyers
When Halifax investigated factors influencing choices for first-time buyers, property prices emerged as a leading consideration. Proximity to family and friends, local crime rates, a strong community feel, and good transport links were also important. Work potential, available green spaces, and closeness to a city featured in the top ten considerations.
Often confronted with high prices, about 60% of these buyers are willing to look farther afield, outside of family and friends’ networks, to get onto the property ladder. Almost two out of every five surveyed by Halifax accentuated that the property’s location mattered more than the property itself.
Halifax’s mortgages director, Kim Kinnaird, said that despite fluctuating house prices, there is still a strong demand from young people, with around 90% eager to make their first property purchase. She pointed out these buyers are open to considering more affordable, upcoming areas, given the relatively low house prices and other advantages like accessible green space, safety, and commuting convenience.
Impact of Mortgage Rates on First-Time Buyers
Despite attractive areas and tempting prices, getting onto the property ladder still presents obstacles. Potential homeowners contend with challenges like higher mortgage rates, deterring around 41% of potential first-time buyers and delaying their plans by around four years on average. Cost factors have forced about 55% to reassess the property types they were originally considering.
And the research from Halifax reveals that around 71% are prioritizing other purchases over property. For instance, 31% are considering travel instead of a home purchase, while 30% prioritize car purchases.
Presently, the average five-year fixed-rate mortgage in the UK stands at 5.96%, as indicated by Moneyfacts, meaning that a 25-year term, £200,000 mortgage holder, would end up paying £1,284 a month.
However, mortgage rates may be easing. On Tuesday, Nationwide Building Society announced a reduction across most of its fixed mortgages by up to 0.45 percentage points. First-time buyers with at least a 40% deposit will also benefit from a secured rate of 4.74% if fixing for five years with Nationwide.
If you’re looking at property investment from a tenant’s perspective, these new favourite areas for first-time buyers might just be the next big thing.