New analysis from Rightmove found that areas by the coast have seen the biggest decline in first-time buyer affordability during the coronavirus pandemic
First-time buyers in the UK are struggling to purchase properties in coastal areas as strong house price growth has outpaced local salaries.
New analysis from Rightmove found that areas by the coast have seen the biggest decline in first-time buyer affordability during the coronavirus pandemic.
The data, published on Wednesday, is based on an average solo first-time buyer, and assumes they have saved up a 10% deposit towards an average first-time buyer type property in their area (homes with two bedrooms or fewer).
It also adjusts the latest available local salary data from the Office for National Statistics up to May 2022, by using the average national earnings increase, to get a current picture of local affordability.
The numbers come days after ONS figures showed that, after accounting for inflation, UK workers’ average pay fell by 4.1% in the second quarter – the biggest fall since records started in 2001.
The average first-time buyer type home across the UK is now 7.2 times the average salary, up from 6.9 times in 2019. The average 10% deposit for a first-time buyer home has risen by 17%, to £22,409.
Over half of the top 10 regions to see first-time buyer affordability decline are close to or by the coast, with Adur in West Sussex topping the list, according to the property portal.
The average asking price for a first-time buyer type home in Adur is now 11.6 times the average salary for the area, up from 8.7 times pre-pandemic.
Tim Bannister, data expert at Rightmove, said: The current picture of how affordability has changed for new first-time buyers trying to take out a mortgage looks very different in different parts of Great Britain.
It’s much harder for first-time buyers in the areas where prices jumped considerably over the past few years, especially when you add in six consecutive interest rate rises and average local salaries not keeping pace, he said.
We’re still seeing the effects of the pandemic whereby prices for homes near the sea are at a premium, with house prices quickly outpacing local salaries, he said.
He said: However, despite stretched affordability, we’re not currently seeing rising prices and interest rates having a significant impact on first-time buyers wanting to move.
