Research has revealed that if you want an affordable property, then the traditional solutions of squeezing into a town-centre flat or a small terraced house in the burbs are not your only options. It has found that Britain's 'new towns' are currently at their most affordable since the financial crisis began in 2007.
But why is this, and should this precipitate a move there?
New townsThe real boom time for New Towns came after the Second World War, where a number of Acts of Parliament were brought in to allow building on a massive scale in certain underpopulated areas, to get people out of overcrowded cities. New Towns have grown and flourished in places like Milton Keynes, Hatfield, Welwyn Garden City and Warrington.
The research, from Lloyds TSB, revealed that prices in these town are much more affordable than elsewhere in the country or the region. The average price for a home in a New Town is £182,354. That is 6.1 times the gross annual average earnings of the town (£29,794). This represents a fall from 6.3 times income over the past year and is below the national average of 6.9 times salary.
Why is this?Housing in these towns is relatively cheap: they are on average a fifth (21%) lower than the national average (£230,325). However, the improvement in affordability over the past five years hasn't come from some sort of precipitous price fall - because prices have remained broadly unchanged. It has been driven by an increase in average earnings, which across New Towns has risen by an average of 9%.
In fact, the house prices in these towns have proven particularly resilient since the start of the housing downturn in 2007. There have been increases in Hatfield (14%), Welwyn Garden City (8%), Harlow and Hemel Hempstead (both 6%). Outside the south east only Skelmersdale in Lancashire has recorded any price growth (7%). However, even at the other end of the spectrum, where prices have fallen in Newtown in Powys (14%) and Corby in Northamptonshire (12%), they have done better than their surrounding areas.
Should we move there?Lower prices, increasing affordability and price resilience all make a move to a new town well worth considering. Suren Thiru, housing economist at Lloyds TSB, adds: "Many New Towns are within easy commuting distance of major commercial centres, where housing is typically more expensive. This is particularly striking for New Towns in the south east, where the average property price is close to half, on average, compared to that in London.
"The combination of strong earnings growth and lower priced property, together with good accessibility to the capital, has helped to support prices in many New Towns in the south east during the economic and financial downturn. In addition, populations in many New Towns in the south east have increased since 2007, which is likely to have added to housing demand."
The question is whether this is enough to make you consider a new life in a 'new' area, or whether the draw of the older and more traditional areas is too much to resist, What do you think? Let us know in the comments.
10 Most Affordable New Towns, 2012New Towns and their Price to Earnings ratio
Newton Aycliffe 4.5
Sources: Land Registry, ONS
10 Least Affordable New Towns, 2012New Towns and their Price to Earnings ratio
Welwyn Garden City 7.5
Hemel Hempstead 6.6
Milton Keynes 5.8
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