If you are considering buying your first home, you might be wondering where the most affordable place to live will be.
Figures show that you could be spending more on your rent or mortgage, depending on your location or where you want to live.
Rightmove analysis revealed that Aberdeen is the cheapest city for first-time buyers, with the average asking price for a typical first-time buyer-type property (two bedrooms or fewer) costing £102,602 and the average monthly mortgage payment at £406 per month.
The average monthly mortgage payment is based on the assumption the buyer in Aberdeen has a 20% deposit and has chosen to repay their mortgage over 35 years, at the current average five-year fixed mortgage rate of 4.84%.
Data from UK Finance shows that the average deposit size in Scotland and Wales is 20%, while in England it is 25%, and that more first-time buyers are choosing longer repayment terms to improve their affordability.
Bradford is the second cheapest city to be a first-time buyer, with an average asking price of £107,929, and Sunderland is the third cheapest, at £111,263.
However, Carlisle is the cheapest place to be a renter, with the average advertised rent for an equivalent two-bedroom or smaller property now £607 per month.
In contrast, Oxford is the most expensive city outside of London to be a renter, with an average two-bedroom or smaller home currently advertised at £1,561 per month.
Despite average mortgage rates currently being slightly higher than at this time last year, there has been more stability since rates peaked in July 2023, which has helped those looking to move at the start of this year.
The average monthly mortgage payment for a typical first-time buyer-type property in Great Britain (two bedrooms and fewer) is £53 more than this time last year, vs £81 for renters.
For those who have been able to save up the average deposit of 20% or 25%, it is cheaper to pay a monthly mortgage than rent in each of Great Britain’s largest cities, as well as the capital.
The cost of renting a two-bedroom or smaller home has increased by 39% in the last five years, versus a 19% jump in the cost of buying a two-bedroom or smaller home.
Even if a first-time buyer had a smaller 15% deposit and wanted to repay their mortgage over 25 years rather than 35 years, it would still be cheaper to pay a mortgage than rent in 39 out of Britain’s 50 largest cities, outside of London.
Rightmove’s property expert Tim Bannister said:
“These latest figures highlight why so many people remain determined to get onto the ladder, as the soaring costs of renting has meant buying has remained attractive even with higher mortgage rates.
“Longer mortgage-terms are becoming more common as a way to improve overall affordability and reduce monthly payments, though first-time buyers should be aware of what they are paying in interest compared with their actual mortgage.
“Without improvements to the supply of good quality, affordable rental homes in Great Britain, owning your own home is likely to continue to be the end-goal for those that can get their deposit together, and borrow what they need to from a mortgage lender.”
We have rounded up the top 10 cheapest places for first-time buyers:
- Aberdeen
- Bradford
- Sunderland
- Carlisle
- Preston
- Hull
- Dundee
- Stoke-On-Trent
- Durham
- Doncaster
Further reading
Purchases – Oakwood Property Solicitors
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