BRITAIN is brimming with first time buyer hotspots where properties are up to 15% cheaper than the average price of the rest of the UK.
Manchester has emerged as the number one place new homeowners are flocking to.
Unauthenticated domain error.Young buyers accounted for 75% off all home purchases in the UK’s third largest city, up from 65% in 2020, new figures from lender Halifax have revealed.
The average first-time buyer property price is £212,891, which is around £35,000, or 15%, below the average in Britain.
A deposit in the city can cost as little as £10,644 if applicants qualify for a 95% mortgage.
Second on the list is Slough in Berkshire, which has become an increasingly popular location for first-time buyers, who represented 73% of all properties purchased with a mortgage in the area last year.
The average property price in the town for first-time buyers is £322,961, around £75,000 above the British average, but still well below the average of nearby London £490,235.
Properties in Sandwell are also significantly cheaper than the British average at £179,058 and also around £40,000 below the average for the West Midlands which is £221,307.
You could get a deposit in this area for £8,952 if you get access to the 95% mortgage.
The cheapest area for first time buyers is in Knowsley in Merseyside, England.
The village is located between Liverpool and Manchester, easily accessed via the M6.
Houses here go for £157,139 and a deposit is just £7, 856 when putting down 5% of the property value.
The full list of first-time buyer hotspots, with the average cost of a home is below:
Amanda Bryden, head of Halifax Mortgages, said: “First-time buyers are often more willing to relocate to new areas in pursuit of finding the ideal home within their financial reach.
“This flexibility opens up a broader range of possibilities and can lead to more affordable housing options.”
Affordability has been one of the biggest barriers to entry for young buyers.
Factors such as wage stagnation and high inflation have all played a part in limiting people’s ability to get on the housing ladder.
We break down all you need to know about mortgages and what categories they fall into.
A fixed rate mortgage provides an interest rate that remains the same for an agreed period such as two, five or even 10 years.
Your monthly repayments would remain the same for the whole deal period.
There are a few different types of variable mortgages and, as the name suggests, the rates can change.
A tracker mortgage sets your rate a certain percentage above or below an external benchmark.
This is usually the Bank of England base rate or a bank may have its figure.
If the base rate rises, so will your mortgage but if it drops then your monthly repayments will be reduced.
A standard variable rate (SVR) is a default rate offered by banks. You usually revert to this at the end of a fixed deal term, unless you get a new one.
SVRs are generally higher than other types of mortgage, so if you’re on one then you’re likely to be paying more than you need to.
Variable rate mortgages often don’t have exit fees while a fixed rate could do.
Green shoots have started to emerge in the wider property market, with the pace at which property prices increase now at the quickest since December 2022.
Mortgage approvals for home buyers have jumped to the highest level since Liz Truss‘ disastrous mini-budget was delivered.
New figures from the Bank of England recorded 62,000 approvals for house purchases in July – the highest total since 65,100 were recorded in September 2022.
Earlier this month a string of the UK’s biggest lenders also cut interest rates on mortgage deals to below 4%, in a boost for cash strapped buyers.
This was in response to the Bank of England reducing the base rate from 5.25% to 5% after seven months.
When the base rate is reduced it can often be an indicator that sentiment in the housing market might improve.
This is because banks and building societies use it to set the rate of it interest it charges on products including mortgages.
The First Homes scheme was launched in 2021 and means prospective first-time buyers in England can get homes at 30% and 50% discounted rates compared to market price.
But if the homeowner decides to sell the property down the line, the discount on the new value will be made available to any future buyer too.
As well as being first-time buyers, you also have to be aged 18 or above to qualify.
Each council has its own criteria for the scheme so make sure that you check with your local one.
If you don’t know who your local council is, you can find it using this handy tool.
Another option is the Right to Buy scheme which is a government initiative that lets council house tenants buy the property the rent.
These homes are offered at a reduced price to help renters get on the ladder.
You get a 35% discount on your council home if you’ve been a public sector tenant for between three to five years.
After five years, the discount increases by 1% for each extra year you’ve been a public sector tenant.
There are also other schemes such as Right to Acquire which works in a similar way to Right to Buy, and Shared Ownership which is also known as part-buy, part-rent.
Another option is a 95% mortgage, which lets you buy a home with a 5% deposit.
Most lenders, such as Halifax and NatWest offer this as an option.
However, in most instances you will not be eligible for the loanif the home you want to buy is above a certain value i.e £600,00.
Also it is worth bearing in mind that a 95% mortgage isn’t compatible with other housing schemes, such as shared equity, shared ownership and Right to Buy.
To get more information about these schemes and five other ways you can get discounts on your home, we spoke to mortgage expert David Hollingworth.
