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The places first-time buyers can find the biggest bargain homes have been revealed in new analysis.

Research by estate and lettings agent, Barrows and Forrester, has revealed where in the UK people buying their first home can find the best value, based on the average price paid for a first home compared to the rest of the market.

What does that mean?

Across Britain, the average first home currently costs £220,460, having increased by 9.9% annually.

The average price paid by former owner occupiers (FOO) – a.k.a those funding the purchase of a new home with the sale of an existing home – is £309,462, having increased by 11.4% in the past 12 months.

This means, on average, first-time buyers in Britain benefit from a 28.8% price drop when compared to the rest of the market.

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Where can the biggest price drops be found?

Regionally speaking, nowhere in Britain do first-time buyers get a more affordable purchase price than in Scotland, where they pay an average of £144,829 versus the £218,673 paid by FOOs – a discount of 33.8%.

Following closely behind is the South East, where the average first-time buyer pays 32.9% less to get a foot on the ladder, while the South West (28.5%), West Midlands (28.5%), East of England (27.6%), North West (26.7%), North East (26.1%), East Midlands (26.1%) and Wales (25.9%) are also home to a discount of 25% or more.

Just Yorkshire and Humber (24.9%), and London (24.3%) are home to a first-time buyer prices of less than a 25% reduction.

Best local authority areas

Interestingly, when dissecting the market at local authority level, the top 10 best FTB discounts are largely dominated by two areas, poles apart geographically speaking – Surrey and Scotland.

The best first-time buyer discount is available in Elmbridge, Surrey, where first time buyers can expect to pay an average price of £450,621, 43.8% below the FOO average of £802,351.

The second-highest first-time buyer discount is found in Woking, Surrey (40.7%); followed by Mole Valley, Surrey (39.1%); Surrey Heath (38.7%); Horsham, Sussex (38.6%); Stirling, Scotland (38.4%); Perth and Kinross, Scotland (38.4%); East Lothian, Scotland (38.3%); Clackmannanshire, Scotland (38.3%); and East Dunbartonshire, Scotland (38.1%).

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

The smallest first-time buyer price decreases tend to be found in London.

In fact, in the City of London, first-time buyers spend, on average, 4.3% more than FOO buyers, the only areas where it costs more for your first home.

In Newham, the price drop is just 5.4%; while Tower Hamlets (5.7%); Waltham Forest (10%); and Hackney (11.1%) round off the five local authorities that offer the smallest relative first-timer house price.

What’s the agent advice?

Managing director of Barrows and Forrester, James Forrester, said: “While a red-hot market has been heralded as a sign of economic success during the pandemic, the steep increase in house prices won’t be so warmly welcomed by the nation’s struggling first-time buyers.

“Despite talk of an interest rate increase, we look set to see yet further upward growth and so the outlook is a little bleak for those scrimping and saving for a mortgage deposit without the financial security of an existing home to sell.

“The small silver lining is that first-time buyers continue to pay less although this is, of course, influenced by the fact they generally purchase smaller homes to begin with, compared to second- and third-rung buyers.

“Rather than a string of half-baked schemes designed to ‘help’ first-time buyers by further fuelling demand, we would love to see the government actually address the issue of supply and build more affordable homes to satisfy our unwavering appetite for homeownership.”

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Full breakdown of regions:

The figures show August 2021’s average FTB (first time buyers) house price and annual change, August 2021’s average FOO (former owner occupiers) average and annual change and the difference between FTB and FOO prices.

Scotland –  FTB avehp: £144,829, Annual FTB avehp increase: 15.4%, FOO avehp: £218,673, Annual FOO avehp increase: 18.4%, difference between FTB & FOO: -33.8%

South East – FTB avehp: £282,188, Annual FTB avehp increase: 7.8%, FOO avehp: £420,359, Annual FOO avehp increase: 9.5%, difference between FTB & FOO: -32.9%

South West – FTB avehp: £234,911, Annual FTB avehp increase: 7.9%, FOO avehp: £328,740, Annual FOO avehp increase: 9.7%, difference between FTB & FOO: -28.5%

West Midlands Region – FTB avehp: £189,007, Annual FTB avehp increase: 10.3%, FOO avehp: £264,347, Annual FOO avehp increase: 11.7%, difference between FTB & FOO: -28.5%

East of England – FTB avehp: £267,311, Annual FTB avehp increase: 9.0%, FOO avehp: £369,261, Annual FOO avehp increase: 10.1%, difference between FTB & FOO: -27.6%

North West – FTB avehp: £163,219, Annual FTB avehp increase: 11.9%, FOO avehp: £222,594, Annual FOO avehp increase: 12.9%, difference between FTB & FOO: -26.7%

North East – FTB avehp: £126,661, Annual FTB avehp increase: 12.5%, FOO avehp: £171,464, Annual FOO avehp increase: 14.2%, difference between FTB & FOO: -26.1%

East Midlands – FTB avehp: £185,759, Annual FTB avehp increase: 10.0%, FOO avehp: £251,307, Annual FOO avehp increase: 10.7%, difference between FTB & FOO: -26.1%

Wales – FTB avehp: £167,576, Annual FTB avehp increase: 12.3%, FOO avehp: £226,229, Annual FOO avehp increase: 12.6%, difference between FTB & FOO: -25.9%

Yorkshire and The Humber – FTB avehp: £158,337, Annual FTB avehp increase: 8.2%, FOO avehp: £210,726, Annual FOO avehp increase: 9.3%, difference between FTB & FOO: -24.9%

London – FTB avehp: £455,377, Annual FTB avehp increase: 7.0%, FOO avehp: £601,844, Annual FOO avehp increase: 8.0%, difference between FTB & FOO: -24.3%

By Jamie Jones

Source: Herald Scotland

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