Cheapest city for property investors and FTBs revealed

The most economical cities for first-time homebuyers in the UK have been revealed – and it offers valuable insights for property investors.

The research from Rightmove reveals that Bradford is the most affordable city for first-time buyers.

Homes there have an average monthly mortgage payment of just £521.

The property platform says the typical property suitable for first-time buyers in the city has an asking price of £104,643.

‘Cheaper to pay off a mortgage as a first-time buyer’

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.”

He added: “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.”

Examined the average monthly mortgage payments

The study examined the average monthly mortgage payments and equivalent rents for two-bedroom or smaller properties across various cities in Great Britain.

The calculations were based on first-time buyers obtaining a five-year fixed, 90% Loan-to-Value (LTV) mortgage at the best-buy rate of 4.45%, spread over 25 years.

Carlisle comes in as the second most affordable city with an average monthly mortgage payment of £522, followed by Aberdeen (£528 per month) and Hull (£532 per month).

However, St Albans stands out as the priciest city, excluding London, for first-time buyers.

Here, the average monthly mortgage payment for a suitable property is £1,958, followed by Bath (£1,765 per month) and Cambridge (£1,763 per month).

More cost-effective than renting

Interestingly, in half of the cities surveyed, paying a monthly mortgage on a first-time buyer property is more cost-effective than renting, provided buyers can save a 10% deposit.

This number increases to two-thirds of the cities if first-time buyers manage to save a 15% deposit, which would lower their monthly payments.

The study highlights the significant gap between demand and availability of rental homes and the soaring rents in many areas of Great Britain.

Glasgow offers the most significant savings for first-time buyers, with the average monthly mortgage payment being £215 cheaper than rent.

In contrast, first-time buyers in St Albans face the most considerable increase in monthly payments when purchasing a home, with a difference of £525 compared to renting.

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