As a potential first-time homeowner, you’ve likely noticed the numerous reports on how housing prices fluctuate depending on location.
It’s also useful to have an idea of potential mortgage payments if you’re considering a purchase. We’ve compared the average listing prices for homes in over 50 cities across Great Britain to point out where the most affordable cities are for new homeowners.
Our focus is on properties ideal for first-time buyers, specifically those with 2 bedrooms or fewer. Utilizing UK Finance’s average deposit data for each city, we calculated possible monthly mortgage payments. These calculations were made assuming buyers receive a five-year, fixed-rate mortgage spread over 35 years, at a rate of 4.84%*.
According to the same UK Finance data, an average first-time buyer deposits 20% in Scotland and Wales, while in England the deposit is typically 25%. Additionally, there’s a growing trend for buyers to choose 35-year mortgage terms.
The national average price for a starter home is £227,110. However, every city in our top five list offers average prices under half the national average.
The 10 Most Affordable Cities for First-Time Buyers
Our research indicates that Aberdeen in Scotland is currently the most affordable city for first-home purchases, with Bradford in West Yorkshire and Sunderland in the northeast following close behind.
Aberdeen’s average property price for new homeowners is £102,601. As Scotland’s third-largest city, noted for its unique stone buildings, it lies in the northeastern region.
Every city in the top 10 has average mortgage payments that are less than local rents, assuming buyers can afford the typical deposit.
Check out the list to see these cities, along with their average local mortgage and rent costs.
Cities | Average price for a first-time buyer-type property (2 bedrooms or fewer) | Average mortgage payment (per month)* | Average rental payment (per month) | Mortgage vs. Rent |
---|---|---|---|---|
Aberdeen | £102,601 | £406 | £775 | -£369 |
Bradford | £107,929 | £400 | £714 | -£314 |
Sunderland | £111,263 | £413 | £648 | -£235 |
Carlisle | £111,268 | £413 | £607 | -£194 |
Preston | £112,273 | £416 | £787 | -£371 |
Hull | £113,920 | £423 | £638 | -£215 |
Dundee | £116,191 | £460 | £821 | -£361 |
Stoke-on-Trent | £117,113 | £434 | £701 | -£266 |
Durham | £125,957 | £467 | £796 | -£328 |
Doncaster | £128,062 | £475 | £707 | -£232 |
*Rate as of 17th April 2024, provided by mortgage technology service Podium Solutions.
The Current State of the Rental Market
The cost of purchasing a smaller home has climbed by 19% over the last five years, while rent for similar properties has jumped by 39% in the same time frame.
From the cities we’ve analyzed, only 11 were found to be cheaper to rent in than to buy, based on monthly payment comparisons.
Our real estate specialist, Tim Bannister, explains, “These figures demonstrate why becoming a homeowner remains a strong desire for many, as the steep rental costs make buying seem favorable despite increased mortgage rates.”
Longer mortgage durations are a growing choice for making home buying more affordable by decreasing monthly payments. However, it’s important to understand that this means paying more interest over time. Tim emphasizes that the dream of homeownership is likely to persist for those able to collect a deposit and secure a mortgage, unless there’s an improvement in the availability of quality, competitively-priced rental homes in Great Britain.
Trends in Mortgage Rates
If you’re on the market for a house and need a mortgage, you may be curious about the current average mortgage rates and their impact on your monthly expenses. You can find updated average UK mortgage rates here weekly.
Discover what you might be able to borrow with our mortgage calculator, or apply for a Mortgage in Principle online. It’s a swift and free process that won’t affect your credit rating.
READ MORE: Spring sees a rise in the number of properties for sale
The figures are based on the assumption that first-time buyers in Scotland and Wales are getting a five-year fixed, 80% LTV mortgage at an average 5-year rate of 4.84%, over 35 years, and first-time buyers in England are taking out a similar mortgage but at 75% LTV.
Please consider: Rightmove does not provide financial advice; the content and views in these articles are not meant as financial advice and should not serve as the sole basis for financial decisions. Always seek advice from a mortgage specialist.