Australia’s Cheapest Towns for First-Home Buyers Revealed

Inverclyde Leads the Pack as Most Affordable for First-Time Buyers

In a significant shift in the property landscape, the Scottish town of Inverclyde has been recognised as the most affordable location for first-time buyers looking to secure a starter home. This finding comes from a comprehensive analysis by Nationwide, Britain’s largest building society, which has mapped out the most and least accessible areas for those stepping onto the property ladder across the country. The study reveals a positive trend, with affordability improving in a notable 70 per cent of local authorities over the past year.

The analysis meticulously examined house prices for first-time buyers against average annual earnings in every local authority across England, Wales, and Scotland. This allowed for a detailed calculation of affordability in various regions, highlighting stark contrasts between the most and least accessible markets. While a surge in mortgage products aimed at assisting young people has undoubtedly contributed to improved affordability, certain exclusive areas remain prohibitively expensive.

Northern and Scottish Hotspots Shine for Affordability

Northern England and Scotland emerge as significant oases of affordability for those embarking on their homeownership journey. Inverclyde, renowned for its picturesque scenery and convenient 45-minute commute to Glasgow, has claimed the top spot. Here, buyers can acquire a property for a remarkably low 2.9 times their annual income. With average prices for starter homes hovering around £100,000, a 10 per cent deposit amounts to a manageable £9,700.

Beyond Scotland’s borders, Burnley in the North West stands out as the most affordable area, boasting a house price-to-earnings ratio of just 2.8. In the North of England, Hartlepool offers similar appeal with a ratio of 2.9, while Stoke-on-Trent continues its reign as the most affordable in the West Midlands, at 3.4.

Andrew Harvey, senior economist at Nationwide, commented on the findings: “Kingston upon Hull is the most affordable local authority in Yorkshire and The Humber, with a ratio of 3.0. South of the river, West Lindsey in Lincolnshire is the most affordable part of the East Midlands. Further down the east coast, Great Yarmouth in Norfolk continues to have the lowest ratio in East Anglia and is also the lowest priced area in the region. Meanwhile, on the south coast, Gosport in Hampshire is the most affordable area in the outer south east, with notably lower average prices than elsewhere at around £200,000. Swindon remains the most affordable town in the South West, with a house price earnings ratio of 4.8. Meanwhile in the Outer Metropolitan region, Surrey Heath, which includes Camberley and Bagshot, is the most affordable area, due to relatively high earnings.”

Best First-Time Buyer Spots Across the Country:

• Scotland
  • Inverclyde
    • Price to earnings ratio: 2.3
• N West
  • Burnley
    • Price to earnings ratio: 2.8
• North
  • Hartlepool
    • Price to earnings ratio: 2.9
• Yorkshire
  • Kingston upon Hull
    • Price to earnings ratio: 3
• Wales
  • Merthyr Tydfil
    • Price to earnings ratio: 3.3
• West Midlands
  • Stoke-on-Trent
    • Price to earnings ratio: 3.4
• East Midlands
  • West Lindsey
    • Price to earnings ratio: 3.7
• East Anglia
  • Great Yarmouth
    • Price to earnings ratio: 4.3
• Outer south east
  • Gosport
    • Price to earnings ratio: 4.7
• Outer Metropolitan
  • Surrey Heath
    • Price to earnings ratio: 4.8
• South west
  • Swindon
    • Price to earnings ratio: 4.8
• London
  • Bromley
    • Price to earnings ratio: 6.2

Even within the capital, Bromley, a town in the South East of London, emerges as the most affordable local authority for purchasing a home. However, with properties still costing 6.2 times the average annual earnings, it remains out of reach for many, particularly those seeking their first property.

Tom Bill, from estate agent Knight Frank, explained the broader trend: “Buyers have been forced to find value in other areas of the country as property price tags in London and the South East leave buyers ever more squeezed. Affordability continues to shape the map of house price growth, with regional parts of the country having slowly narrowed the gap with London over the last decade. With buyers increasingly squeezed by prices in the capital, they have found more value in other parts of the country, which has been made easier by blue chip companies setting up regional operations.”

Glamorous Kensington Remains Out of Reach for Most

At the other end of the spectrum, the exclusive borough of Kensington and Chelsea stands out as the least affordable area. Here, the average home commands a staggering 13.9 times the average annual earnings, placing it firmly out of reach for the vast majority of first-time buyers. This area is synonymous with some of the most expensive properties in the UK, and the cost of ownership is astronomical. A 10 per cent deposit alone averages around £100,600, according to Nationwide’s data.

Beyond the capital, Oxford presents the next most expensive challenge, with properties costing eight times the average annual income. In East Anglia, Cambridge follows with a house price-to-earnings ratio of 7.3. The Outer Metropolitan area sees Spelthorne at 7, and in the South West, South Hams has a ratio of 6.9.

Mr Harvey further elaborated: “Spelthorne in Surrey is the least affordable local authority in the Outer Metropolitan region. Close to London, this is prime commuter territory and includes towns such as Staines-upon-Thames, Sunbury-on-Thames and Shepperton. In the South West, South Hams in Devon is a popular tourist location, taking in places such as Totnes, Dartmouth and Salcombe. However, with average prices nearly seven times average earnings, it is very challenging for local prospective first-time buyers. Meanwhile, in the East Midlands, Derbyshire Dales is one of the highest priced areas, with much of it sitting within the Peak District National Park, including towns such as Matlock, Ashbourne and Bakewell.”

Worst First-Time Buyer Spots Across the Country:

• London
  • Kensington & Chelsea
    • Price to earnings ratio: 13.9
• Outer south east
  • Oxford
    • Price to earnings ratio: 8
• East Anglia
  • Cambridge
    • Price to earnings ratio: 7.3
• Outer Metropolitan
  • Spelthorne
    • Price to earnings ratio: 7
• South west
  • South Hams
    • Price to earnings ratio: 6.9
• East Midlands
  • Derbyshire Dales
    • Price to earnings ratio: 5.7
• West Midlands
  • Stratford-on-Avon
    • Price to earnings ratio: 5.6
• North west
  • Trafford
    • Price to earnings ratio: 5.5
• Yorkshire
  • York
    • Price to earnings ratio: 5.4
• Wales
  • Cardiff
    • Price to earnings ratio: 5.3
• Scotland
  • Midlothian
    • Price to earnings ratio: 4.9
• North
  • Westmorland & Furness
    • Price to earnings ratio: 4.1

He continued: “Another sought-after area is Stratford-on-Avon in Warwickshire, which is the highest price location in the West Midlands, with average first-time buyer house prices around £300,000.” In the North, Westmorland and Furness, which encompasses large parts of the Lake District, presents the least affordable region, with homes priced at 4.1 times the average earnings. In Scotland, Edinburgh is no longer the least affordable, with homes in Midlothian now costing 4.9 times income.

Mary-Lou Press, of estate agency group Propertymark, summarised the situation: “This is a mixed picture for first-time buyers across the country. Significant regional disparities remain. While some parts of the country are becoming more accessible to buyers, high house prices in areas such as London and the South East continue to create substantial barriers, particularly when it comes to saving for a deposit.”