First-time buyers – how to find hidden gems in affordable areas

First-time buyers – how to find hidden gems in affordable areas

Tepilo analyses the most affordable regions in Britain and explores how first-time buyers can find a good investment in these areas.

As exciting as it may be, buying a home for the first time can also be a daunting prospect. Luckily, conditions for first-time buyers (FTBs) are now on the up, following the 2017 Autumn Budget.

The Chancellor recently delivered the Budget, announcing new funding packages and policies. Reforms in the housing market, increasing the UK National Minimum Wage, introducing the Millennial Railcard and investing more money into the NHS were just some of the key topics covered.

When it comes to housing, the slashing of stamp duty for first-time buyers was the announcement that got tongues wagging across the UK. Many have debated the impact it will leave on the housing market in years to come, how first-time buyers will actually benefit, and where it will leave other buyers, including second-steppers, downsizers and landlords.

It’s clear, however, that some first-time buyers could potentially gain a lot from this change, as they will pay no stamp duty on properties priced up to £300,000, while paying 5% on any properties valued between £300,000 and £500,000. Standard rates will apply on any property purchased for over £500,000.

With prospective first-time buyers now returning to the property market in their droves, how can they find hidden gems and lower their costs even more substantially?

In order to get a good property at a nice price with low or no stamp duty, buyers will need to compromise or look for homes in affordable areas. According to a study by Post Office Money, 70% of purchasers over the last 24 months bought a home that was an average of 26 minutes away from their desired original location.

The study also revealed which cities are the most inexpensive for first-time buyers, providing an affordability overview based on the average price of properties.

Southampton won the top spot, with 95% of properties deemed affordable for first-time buyers and the average property priced at £99,074. Norwich was close behind, with an affordability percentage of 93% and the average property priced at £196,987. Nottingham claimed third place, with an average property price of £128,192 and 89% of properties classed as affordable. Under the new system, average first-time buyers would not be required to pay stamp duty in any of these locations.

While many may assume that London would come last on the affordability scale for first-time buyers, it was in fact third from the bottom. Some 30% of properties were affordable for first-time buyers in the capital, with the average property priced at £534,272. Average first-time buyers in the capital, therefore, will be required to pay normal stamp duty rates.

Bristol came second to last, with an affordability percentage of 29% and average properties priced at £268,070 – still under the no stamp duty threshold. Brighton was dubbed the least affordable region overall, with average properties priced at £352,303 and only 2% of properties considered affordable for first-time buyers – compared to 25% five years ago. The average first-time buyer in this area would need to pay 5% stamp duty on a sum of £52,303.

Interestingly, Bristol experienced the biggest shift in affordability, with the percentage shrinking by 20%, leaving only 29% of homes in the city fitting within the average budget of first-time buyers. Property prices since than have also increased by 14% to £258,070.

With these figures in mind, first-time buyers who are ready to move will need to identify potential hotspots and the affordable locations of the future. For those looking to make a good financial investment, it could help to take these factors into consideration:

Property prices

Look where property prices are lower than the city/region’s average to identify the more affordable areas.

High growth

Avoid areas that have seen substantially high growth in recent years. This suggests that any potential growth in the future has already been exhausted and prices will not increase as rapidly in the coming years.


See if there are any planned transformation projects or developments of infrastructure that could impact the area. These are usually publicly announced at least two years before works are underway, signalling regeneration in the area and, essentially, a possible future increase in prices.

Crime rates

Look into crime rates in the area to determine whether things are getting better or worse. There is usually a delay between when an area is deemed ‘safe’ and when the public becomes aware of this. If you can spot this ahead of the market and buy when prices are more affordable, you may find a future gem.

School developments

Research to see if there are any developments planned for schools in local areas. Educational improvements push prices up over a sustained period of time.

All in all, it’s clear that there are now greater opportunities for the nation’s first-time buyers, and with a broader approach to purchasing a first home, the property ladder shouldn’t be too far away, either.