First-time buyers face 'unaffordable blackspots' in major cities

Major cities are becoming "unaffordable blackspots" for first-time buyers trying to get on the property ladder across England and Wales, a study has found.

Homes in just 9% of neighbourhoods in Brighton are affordable to first-time buyers on average wages there, while in Cardiff less than half (48%) are affordable. In London 41% of neighbourhoods are affordable and in Leeds just over two-thirds (68%) are affordable, Post Office Money Mortgages found.

The research used official house sales data in 2015 and calculated average house prices in postcode areas across the major cities. It also looked at the average salaries of first-time buyers in these places. If the average house price in a particular area was more than 4.5 times the average first-time buyer income there, it was deemed unaffordable.

The study found that 20 years earlier - in 1995 - 100% of Brighton would have been affordable for the average first-time buyer there.

It said house prices in the city have increased by 463% over the past 20 years and now stand at £305,149 on average, leaving only 9% of neighbourhoods in Brighton within the average first-time buyer's budget.

Along the coast, Southampton was found to be one of the more affordable spots for first-time buyers, with properties there costing £183,443 on average.

And although London has a higher proportion of neighbourhoods where the average home is affordable to first-time buyers than some other cities, the leap to get on the property ladder is the highest in the study, with the average home costing just shy of half a million pounds, at £498,174 - equating to 6.41 times a first-time buyer's income.

John Willcock, head of mortgages at Post Office Money, said: "These figures highlight the challenges facing today's first-time buyers.

"Cities such as Brighton are becoming unaffordable blackspots for those looking to get on the ladder, with average property prices far beyond the typical budget.

"The London property market has always been more challenging for new buyers to break into, which is why many instead turned to surrounding areas within a commutable distance - which in turn are becoming increasingly unaffordable."

The "priced out" study also revealed the lengths to which first-time buyers are willing to compromise on their wants and needs to achieve their property aspirations.

Almost nine in 10 (87%) of those who bought their first home in the last year said they were forced to lower their expectations to get on the ladder, compared with less than three in 10 (29%) who bought more than 20 years ago.

Nearly a quarter (24%) of first-time buyers within the past year moved further away from local transport links than they had planned, and a fifth (18%) sacrificed living close to good schools.

The report said demands on properties themselves are also changing, with gardens becoming less of a "must-have", with 41% of people who got onto the property ladder before 1995 saying a garden was an essential compared with 13% of those buying in the past year.

More than 2,000 people were surveyed for the research in March.

Here are the percentages of major cities deemed "affordable" to a first-time buyer in 1995, followed by the percentages in 2015, according to Post Office Money Mortgages:

- Birmingham, 96%, 82%

- Brighton, 100%, 9%

- Bristol, 95%, 56%

- Cardiff, 90%, 48%

- Leeds, 91%, 68%

- Liverpool, 97%, 87%

- London, 81%, 41%

- Manchester, 95%, 86%

- Newcastle, 93%, 76%

- Norwich, 100%, 93%

- Nottingham, 100%, 89%

- Plymouth, 100%, 84%

- Sheffield, 97%, 80%

- Southampton, 100%, 94%

A Department for Communities and Local Government spokesman said: "Anybody who aspires to own their own homes should have the opportunity to do so.

"More than 291,000 people have been helped into home ownership through government-backed schemes since 2010 and mortgages for first-time buyers are up 11% year-on-year.

"But we know there's more to do. That's why we've doubled the housing budget to build a million extra homes, including 200,000 starter homes for young first-time buyers."