Property News

Rarely has the UK property market been trickier for first time buyers. An uncertain economic and political climate has combined with steep sold property prices and stagnant wages and salaries to create a perfect storm. However, even with all that, there are still areas across the UK where would-be first time buyers can hope to make a purchase.

We take a look at some of the most promising options for 2020, and at ways in which buyers might fund their purchase.

New builds

New builds can be a tempting proposition and, thanks to help to buy schemes, often a more affordable option. Research conducted by Stone Real Estate in 2019 established that the average new build property costs £295,950. A standard 10 per cent deposit would then be £29,595. A would-be purchaser earning the UK's average salary would take home £1,993 net per month. According to the researchers, it would then take that person 14.9 months to save their 10 per cent deposit. (Of course, this period is an average and higher living costs or pre-existing debt would increase the time needed to save the same figure.)

Based on the Stone Real Estate formula, it is north-east England that currently offers the best new build purchase opportunities for first time buyers. Durham, in particular, stands out. With the city's average net monthly salary of £1,803, it would take someone 8.3 months to save £14,938, which is the price of a 10 per cent deposit on an average new build in the city.

Other cities where it would take the average first time buyer less than a year to save a 10 per cent deposit for an averagely-priced new build are:

Bradford: 10.2 months

Derby: 10.3 months

Dundee: 8.9 months

Glasgow: 9.9 months

Lancaster: 11 months

Lincoln: 11.3 months

Liverpool: 10.8 months

Nottingham: 11.5 months

Sheffield: 10.7 months

Stirling: 9.4 months

Stoke: 9.8 months

Swansea: 10.4 months

Wakefield: 11.7 months

Of course, much as all of these towns and cities have their merits, many first time buyers are constrained by work to London, long notorious for its high house prices. That said, high house prices go hand-in-hand with high net salaries. Currently, with a net monthly average salary of £2,595, someone hoping to buy an averagely-priced (for London) new build could expect to take 18.7 months to save the necessary 10 per cent deposit (£48,434).

However, even within London, there are quicker and cheaper options. For example:

Bexley: 14.7 months

Croydon: 15.5 months

Greenwich: 15.1 months

Richmond: 15.6 months

Tower Hamlets: 15.7 months

Edinburgh is even trickier for first time buyers than London, with the average Edinburgh purchaser taking four years longer than a Londoner to get onto the property ladder. A similar picture exists across much of Scotland.

And, if you're wondering (which you probably are), which are the locations where it takes longest for the average first time buyer to save their 10 per cent deposit, the answer is Exeter (24.3 months) and Cambridge (24.1 months).

Schemes to help first time buyers

Help-to-buy ISA: a tax-free savings plan whereby the government adds £50 for every £200 saved, albeit subject to a £3,000 cap.

Help-to-buy equity loan - a government-funded loan worth up to 20 per cent of a new-build's value (40 per cent in London). It can be taken out on top of a mortgage, provided the buyer has at least a 5 per cent deposit.

Lifetime ISA: a tax-free government savings scheme aimed at encouraging those aged between 18 and 39 to save up to £4,000 per year towards the cost of buying their first home, and to receive a 25 per cent bonus (capped at £32,000) on top.

Shared ownership: allows a buyer to co-own a property with a housing association. The buyer pays a mortgage on the part of the property that they own and pays rent on the portion owned by the housing association. There is the possibility for the buyer to purchase further shares in the home as their income grows.

Potential future schemes to help first-time buyers

Restricted new-build sales in London: Sadiq Khan, the London mayor, is drawing up plans to prevent new build homes worth up to £350,000 in London from being advertised to overseas buyers for the first three months of their marketing.

Starter Home Initiative - a government scheme to sell 200,000 new build properties at a 20 per cent discount to first time buyers. Interested purchasers can register to receive updates on the progress of the scheme.

Average ages of first time homebuyers

Many people waiting to get onto the property ladder find that wait harder to deal with thanks to a widely existing perception that they are being "left behind". Mostly, this is due to the feeling that they will be buying their first home at a much later age than their parents' generation, but sometimes it also relates to their peers' experience. Unsurprisingly, however, given the variation in salaries and sold property prices, the average age for making a first purchase varies across the UK.

Country-wide, the average first time buyer is 27 years old, with this stretching to 30 in Edinburgh, 29 in Leicester, and 28 in Brighton, Cambridge and Glasgow.

Sheffield is home to the UK's youngest first time buyers: the average age is just 23 years old. The reasons for Sheffield's relative success are unclear but may have something to do with a high stock of relatively small terraced houses in desirable areas close to the two universities, the city centre and the two large teaching hospitals. Not far behind, with an average first time purchasing age of 24, is Stoke-on-Trent.

In at 25 is Cardiff, Liverpool and, perhaps surprisingly given its reputation for pricey housing stock and high demand, Oxford.

First time buyers in Leeds, London and Manchester have an average age of 26.

Belfast, Birmingham, Bristol, Newcastle, Norwich, Nottingham and Plymouth are home to first time buyers with an average age of 27.

Those who have yet to make their first purchase may find some reassurance in these findings, particularly in confirmation from the First Time Buyers Age Index survey (who produced these results) that the average age of 27 has not changed in a generation.

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