New research by Halifax has revealed Britain’s hottest locations for first-time buyers are those where stepping onto the property ladder is reshaping the local housing market.
The research, based on data from the Halifax House Price Index, analysed the areas of the country (outside of London) where first-time buyers account for the biggest proportion of home sales.
Despite a housing market characterised in recent years by high property prices and more expensive borrowing costs, these first-time buyer hotspots are proving resilient, with several factors driving their popularity.
CITY OF MANCHESTER
Leading the list, Manchester saw first-time buyers account for 75% of all home purchases made with a mortgage last year, up from 65% (+10pp) in 2020.
The city is well-known for its young and vibrant population. A combination of more affordable housing, a strong jobs market, excellent transport links, rich cultural scene, and ongoing urban regeneration make it an attractive location for many first-time buyers.
Compared to many other cities, Manchester also offers more affordable property prices. The average first-time buyer property price is £212,891, which is around £35,000 below the British average.
Manchester also has a range of property types, from modern apartments in regenerated areas to traditional terraced houses in suburban neighbourhoods, catering to different tastes and budgets.
The city has experienced significant economic growth and business investment, particularly in sectors like technology, finance, and media, opening up new job opportunities.
SLOUGH
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 last year, up from 54% in 2020 (+19pp).
It’s not all about Ricky Gervais’ The Office which shot the town to fame. Over recent years there’s been significant investment in regeneration projects in the town, including new residential, retail and leisure developments.
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).
And with excellent rail connections into London, including via the Elizabeth line, and located just 10 miles from Heathrow, it’s an attractive option for professionals looking to commute, and for growing families after more space outside of the capital.
There is also a strong employment market in the town itself. Forming part of what is sometimes dubbed the ‘UK’s Silicon Valley’ along the M4 corridor, it’s fast becoming a hub for large data centres, bringing hi-tech jobs to the area.
SANDWELL
Next up is Sandwell in the West Midlands, where first-time buyers also made up 73% of all properties purchased with a mortgage last year, compared to 71% in 2020 (+2pp).
Properties in Sandwell are significantly cheaper than the British average at £179,058 and also around £40,000 below the average for the West Midlands (£221,307).
This part of the Black Country is well-connected by major road networks, including the M5 and M6 motorways, and with good train links to Birmingham and Wolverhampton, it’s an ideal location for commuters.
It’s also another area that has undergone significant economic regeneration and business investment over recent years. The borough also boasts 1,200 hectares of parks and green spaces, making it particularly popular with young families.
Amanda Bryden, Head of Halifax Mortgages, says: "Deciding when and where to buy your first home is a deeply personal choice.
“While saving for a deposit and navigating higher interest rates pose a significant challenge for many prospective homeowners, life often intervenes and major milestones such as starting a new job or beginning a family can sway the decision.
“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.
“Buying your own home remains one of the best long-term financial decisions you can make, and across the UK several locations stand out for their appeal to first-time buyers. Notably, Manchester, with its diverse property styles and vibrant cultural scene, has become a magnet for those taking their first steps into homeownership.”
FIRST-TIME BUYER BOOST
Lloyds Banking Group (through Halifax and Lloyds Bank) recently announced First-time Buyer Boost, an improved loan-to-income (LTI) multiple for all eligible first-time buyers. This allows them to borrow up to 5.5 times their household annual income, up from 4.49x.
Based on a household income of £50,000 and a deposit of 10%, this will increase the maximum loan available from c£224,500 to c£275,000 (a 22% increase).
The move will result in an extra £2bn of lending being made available to those taking their first step onto the property ladder. In 2023 alone, the bank lent £12bn to first-time buyers.
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