New research reveals the cheapest city for a first time buyer

A new study from Rightmove has revealed where the UK's most budget-friendly cities for first-time buyers are, as well as the cities where average monthly mortgage payments are giving London a run for its money.

Related topics:  mortgages,  FTB,  affordability
Property | Reporter
5th June 2023
FTB 362
"For those who are able to save up the deposit, it’s still cheaper to pay off a mortgage as a first-time buyer in many areas than pay the equivalent in monthly rent"

With the average monthly mortgage payment on a first-time buyer-type property now £521 per month, Bradford has been found to be the cheapest city to be a first-time buyer in.

The average asking price for a typical first-time buyer-type property in Bradford is £104,643 with the average monthly mortgage payment now £521 per month.

The data analysed the average monthly mortgage payment of a typical first-time buyer-type property (2 bedrooms and fewer) and the equivalent monthly rent in cities across Great Britain. The data assumes first-time buyers are taking out a five-year fixed, 90% Loan-to-Value (LTV) mortgage at the best-buy rate of 4.45%, spread over 25 years.

Carlisle is the second cheapest city to be a first-time buyer, with an average monthly mortgage payment of £522, followed by Aberdeen (£528 per month) and Hull (£532 per month).

St. Albans is the most expensive city to be a first-time buyer excluding London, with average monthly mortgage payments for a first-time buyer type home now £1,958, followed by Bath (£1,765 per month) & Cambridge (£1,763 per month).

It’s cheaper to pay a monthly mortgage on a first-time buyer-type home than rent in half of the cities for those who are able to save a 10% deposit.

This increases to two-thirds of cities if first-time buyers can save up a 15% deposit, therefore reducing their monthly payments, with many parts of Great Britain seeing record rents and a significant gap between demand and availability of rental homes.

First-time buyers in Glasgow make the biggest savings in cash terms by getting on the ladder, with the average monthly mortgage payment for a first home being £215 per month cheaper the average rent, while first-time buyers in St. Albans see the biggest increase in monthly payments when purchasing a first home of £525 compared to the equivalent rent.

Across Great Britain, a typical first-time buyer home is now a record £226,399, and the best-buy rate on a five-year fixed, 90% LTV mortgage is now 4.45% up from 2.79% this time last year.

Despite these price increases, the average mortgage payment on a first-time buyer property is now £1,127 per month, only just edging the average asking rent of £1,120 per month.

Rightmove’s property expert Tim Bannister said: “For those who are able to save up the deposit, it’s still cheaper to pay off a mortgage as a first-time buyer in many areas than pay the equivalent in monthly rent, despite prices reaching a new record at a national level and mortgage rates rising.

"It highlights how frenetic the rental market has been for a long time now, with many areas continuing to see record rents and fierce competition between tenants for the properties available.

"It helps to explain why we’re seeing such determination from first-time buyers to continue to get onto the ladder despite the economic headwinds that they face, and why we’re seeing buyers increasingly return to cities while a bigger proportion of renters are looking to move away.”

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