Soaring house prices have undeniably made it harder for first-time buyers to get on the property ladder. Help is at hand for those whose dream of homeownership might appear to be getting out of reach. Mortgage and insurance broker Hawke Financial Services has conducted research on the best place to buy a first home.
Here is a brief overview of their findings.
[top_pitch]
What is the current housing situation in the UK?
The UK housing market is currently in a frenzy, with house price growth reaching levels not witnessed in years. For example, the latest data from Nationwide shows that house prices increased by nearly 11% in the year to May. This is the highest annual increase in seven years.
According to Hawke Financial Services, the average house price in England is now around £275,000. This is close to 10 times the average UK annual income.
This means that even with generous tax breaks, such as the stamp duty holiday and government programmes such as the mortgage guarantee scheme, the dream of owning a home is slowly slipping further and further away from many would-be buyers.
Where is the best place to buy your first home?
To find the place that buyers have the best chance of success when buying their first home, Hawke looked at:
- The average house price for a semi-detached property
- Year-on-year house price value increase
- The number of houses sold in 2020. The complete data for this study can be found here.
The outcome of their research is that the top place to buy your first home is Lancashire.
In the past year, 17,600 homes have been sold in the county at an average price of £196,589. This is far lower than the average house price in England.
Covering the coast and mountains, Lancashire is rich in culture and heritage. It’s also only a two-hour train ride away from London. These benefits make it easy to see why it’s such a popular location.
Another great place for a first home that buyers might want to consider is South Yorkshire. 18,000 homes were sold in the county this past year, with the average semi-detached house costing £180,210.
According to Hawke, with low house prices and homes readily available, the South Yorkshire region is a great location for those looking to get their hands on their first ever property.
One other notable finding from Hawke’s research is that there is a clear North/South divide in the country. Indeed, the top 14 first-time buyer locations are all north of the M25.
Hawke recommends that first-time buyers take advantage of this by looking for homes in the North, where there is a greater chance of finding more value for your money.
[middle_pitch]
Should you buy your first home now or wait?
The data shows that there are opportunities for first-time buyers even in the midst of rising house prices. However, some may be wondering whether to buy now or wait until the market cools and prices fall.
This can be a dangerous game. The reality is that no one knows with certainty what will happen to house prices in the future. There is a chance that prices will not fall any time soon and will continue to rise for the foreseeable future. In fact, that’s what many housing experts and analysts are currently predicting.
If the house you want is available, you can afford it, and you plan to live there for a long time, it might be better to buy it now rather than waiting for prices to fall only to end up disappointed.
