Coastal areas see biggest drop in accessibility during pandemic: Rightmove

Coastal areas have seen the biggest drop in first-time buyer (FTB) affordability during the pandemic as strong house price growth outpaced local wage developments, the new affordability analysis has found. from Rightmove.

Data is based on an average solo FTB and assumes they were able to save up to 10% down payment on an average FTB property in their area.

More than half of the 10 areas most affected by the fall in FTB accessibility are near or close to the coast, with Adur in West Sussex topping the list.

The average asking price for an FTB-type house in Adur is now 11.6 times the average wage in the region, compared to 8.7 times before the pandemic.

Hertsmere in Hertfordshire is second, where average FTB asking prices are now 11.8 times the average local wage, up from 9.6 times in 2019.

Richmondshire in North Yorkshire comes third, where an average first home is now 8.2 times the local wage, down from 6.0 times.

The majority of areas that have seen accessibility improve during the pandemic are in London or traditional suburban areas, albeit slightly.

Rightmove says affordability has improved in these areas due to local wages rising at a faster rate than housing prices.

Average asking prices in Lambeth are now 11.8 times the region’s average wage, down from 13.3 times before the pandemic.

In Ealing it is now 10.3 times compared to 11.7 times three years ago, and in Reading it is now 6.8 times compared to 7.8 times.

Across Britain, an average FTB home is now worth 7.2 times the average wage, up from 6.9 times in 2019.

The average 10% deposit for an FTB home has increased by 17% to £22,409.

Rising asking prices and interest rates mean the average monthly mortgage payment for new first-time home buyers putting down a 10% down payment is now £1,032, a 39% increase on at the same time in 2019.

Although affordability is tight for many, demand for FTB-like properties is on the rise in the more normal market of 2019.

Demand for FTB-like goods is up 32% from 2019, though it’s down 9% from last year’s frenetic market.

Rightmove data expert Tim Bannister says: “The current picture of affordability developments for new FTBs trying to take out a mortgage looks very different in different parts of Britain.

“It’s much harder for FTBs in areas where prices have jumped dramatically over the past few years, especially when you add six consecutive interest rate hikes and average local wages aren’t keeping pace. “

“We are still seeing the effects of the pandemic, where house prices near the sea are high, with house prices rapidly exceeding local wages. However, despite the tight affordability, we currently do not see rising prices and interest rates having a significant impact on FTBs wishing to move.

“Although demand for FTB homes has normally declined from last year’s dizzying levels, it is still significantly higher than it was in 2019, suggesting that many first-time buyers are heeding increases rates in their own affordability.”

Previous CMA secures new land rent refunds for 5,000 tenants
Next Nearly £100billion in mortgages will mature before the end of the year