UK property hotspots for first-time buyers revealed

The borough of Waverley in Surrey has topped the list of areas in the UK that have become increasingly popular with first-time buyers, according to Santander (BNC.L), which said more people were moving further away to get onto the property ladder.

Waverley, which has an average property price of £385,150, had seen the biggest increase in first-time buyer sales between 2013 and 2023.

That was followed by Waltham Forest in London, which has an average house price of £447,678.

Other areas that had become more popular with first-time buyers, included Bassetlaw in Nottinghamshire, Harlow in Essex, and Knowsley in Merseyside, which had average property prices of £171,000, £291,294 and £186,536 respectively.

The average distance that people moved to buy their first home increased by nearly a quarter over the last four years, with a quarter of Londoners moving out of the capital in order to get onto the property ladder.

Read more: UK house prices rise amid fear of capital gains tax hike

Two-thirds of first-time buyers across the UK moved to areas that they had never lived in before, up from half of those who bought more than five years ago, indicating that people were increasingly compromising on location to fulfil their goal of owning a home.

Buyers who made these moves also benefitted financially, Santander's mortgage data showed, as they saved an average £29,000 in the last two years compared to buying a property in the area where they previously lived.

At the other end of the spectrum, Elmbridge in Surrey, where the average property costs £470,742, saw the largest decline of first-time buyers in the decade to 2023.

Read more: How to save money when moving house

Teignbridge in Devon and Tower Hamlets in London were tied for the second largest fall in first-time buying, with properties costing an average £257,498 and £474,332 respectively. They were followed by Lincoln in the East Midlands, with an average property price of £166,938, and Cambridge (£406,447).

London had become the least popular area for people buying their first home, with the number of first-time buyer purchases dropping nearly 80% in 10 years.

Graham Sellar, head of mortgage development at Santander, said: "Those neighbourhoods which have seen the largest drop in first-time buyer purchases, such as Teignbridge, also tell a story, as it becomes clear that location has become the number one compromise for many looking for their first home."

UK house prices rose last month at their fastest annual pace since late 2022, up 4.3% year-on-year, according to data from Halifax. This took the average house price up to £292,505 in August.

Amanda Bryden, head of mortgages at Halifax, said the growth built on a "largely positive summer for the UK housing market. Prospective homebuyers are feeling more confident thanks to easing interest rates."

Read more: What are self-build mortgages and are they good for first-time buyers?

"That optimism is reflected in the latest mortgage approval figures, now at their highest level in almost two years," she added.

The Bank of England is due to announce its next interest rate decision next week, having decided to lower its base rate to 5% in August. This influences what rates lenders set on mortgages and other types of credit. Markets have been pricing in that the central bank will keep the base rate on hold this month but expect two more cuts this year.

Download the Yahoo Finance app, available for Apple and Android.