When we talk about owning property in the UK, we are often told it’s all about location, location, location. Yet, there is so much more to consider when buying a home, particularly when you’re buying your first home. It’s a well-known fact that over the years, it’s become increasingly difficult to get on the property ladder and often, prospective buyers spend years saving for a deposit; in fact, our research found that it takes 5 years to get there1. Buying a home is one of the biggest expenses we will encounter and it’s important buyers are confident in their decision, aware of how to get the best value for their money.
Scotland offers the most appealing homebuying prospects
In Aldermore’s new First Time Buyer Appeal Index, we looked to identify the best cities for first time buyers. We analysed 50 locations against 10 different indicators to see how desirable a property purchase might be when considering both financial and lifestyle factors. Our research found cities in Scotland were best for first time buyers; Glasgow took first place, followed by Dundee and Aberdeen.
But why is Scotland so appealing for first time buyers? Cities in Scotland and the North of England offer much more value for money compared to Southern cities. Glasgow offers promising property prospects, with an average first-time buyer purchase price of £141,644; this coupled with, decent annual house price increases of 6.5%, make properties in the city a good investment for first time buyers, who make up two thirds (64%) of sales in the city.
When looking at other cities, Liverpool – which was the only English city in the top five – also offered affordable prices (£141,815 on average) coupled with strong annual increases in house prices (6.1%) and reasonable deposit requirements making homebuying more attainable.
Yet, as the saying goes, you can’t have it all and lifestyle considerations across the top five performed less favourably when compared to other cities in the Index – with the exception of Edinburgh (5th place) which offered decent salaries, plenty of amenities and is home to a sizeable community of 25-35 year olds.
London fails to offer attainable standards for first time buyers despite steep demand
London has long been a destination for young professionals, who’ve flocked to the capital either for university or for career opportunities, with a high proportion of graduates making up the workforce (61%) in the region. London offers some of the highest salaries for graduates at £37,000 on average, yet this is almost a necessity given the higher living costs in the city.
It’s understandable, that many prospective buyers would want to look at putting roots down in London. However, the journey to homeownership is a much tougher battle in the capital than Northern cities according to our Appeal Index, as steep property prices (at an average of £436,375) coupled with poor returns on house prices (1.3% annual house price increase) and expensive deposits make the dream of homeownership just that: a dream.
First time buyers with the option of living elsewhere should feel encouraged to broaden their horizons and look elsewhere for cities offering more for their money; indeed, as working-from-home becomes more common, this may be a reality for a greater number of buyers.
When it comes to buying your first home, it’s important to not just consider the location or lifestyle factors, but both; your home will not only be a reflection of the life you’re building as you reach one of your biggest milestones, but it is also an important financial consideration, setting you up for future opportunities. First time buyers are faced with a balancing act as they look for their first home and ultimately, lay the groundwork for their second and third properties in the process.
Find out about our mortgages for first time buyers
Notes
1 Research conducted, on behalf of Aldermore, by Opinium between 31 May -15 June 2022, with a nationally representative sample size of 2,000 Prospective First Time Buyers and 500 actual first time buyers.
2 Aldermore’s First Time Buyer Appeal Index was designed by Opinium and comprises 10 key indicators across two pillars. The index uses a series of secondary data sources including ONS, Census, NOMIS and other official housing statistics.