Hottest spots for first-time buyers in Britain revealed by major lender

The top first-time buyer hotspots in the UK have been revealed following a study of mortgage lending data by a major bank.

Halifax looked at mortgage approval data to calculate the findings, looking at the areas of Britain, excluding London, where first-time buyers account for the biggest proportions of home sales.

Manchester is Britain’s top hotspot outside London, with the city accounting for three-quarters (75%) of home purchases with a mortgage last year, up from just under two-thirds (65%) in 2020.

Halifax said that a combination of relatively affordable housing, a strong jobs market, transport links and ongoing urban regeneration make it an attractive location for many first-time buyers.

The average first-time buyer property price is £212,891, which is around £35,000 below the average across Britain (excluding London), according to Halifax.

The city has a range of property types to choose from, including modern apartments in regenerated areas and traditional terraced houses in suburban neighbourhoods, catering to different tastes and budgets, Halifax said.

It added that the city has experienced significant economic growth and business investment, particularly in sectors such as technology, finance and media, opening up new job opportunities.

In Scotland, Glasgow took the top spot, with first-time buyers making up an estimated 63% of mortgaged property purchases, paying £165,194 typically in 2023.

In Wales, Cardiff was identified by Halifax as the top first-time buyer hotspot, with first-time buyers accounting for around 59% of mortgaged property purchases last year, snapping up a home for £225,797 on average.

Slough in Berkshire was second on Halifax’s overall list.

According to the bank it has become an increasingly popular location for first-time buyers, who represented 73% of all properties purchased with a mortgage last year, up from 54% in 2020, according to the bank’s estimates.

The average property price in the town for first-time buyers is £322,961.

While this is around £75,000 above the average across Britain, it is well below the average price tag in nearby London (£490,235).

With good rail connections into London, including via the Elizabeth line, Slough is an attractive option for professionals looking to commute, and for growing families after more space outside of the capital, Halifax said.

It added that the area is also fast becoming a hub for big data centres.

Sandwell in the West Midlands was placed third, with first-time buyers making up around 73% of properties purchased with a mortgage last year, up from 71% in 2020.

Properties in Sandwell are significantly cheaper than average at £179,058 and also around £40,000 below the average for the West Midlands (£221,307), Halifax said.

As well as being handy for commuters, Sandwell is another area that has undergone significant economic regeneration and business investment over recent years, the report said. Halifax said Sandwell’s green spaces also make it popular with young families.

Amanda Bryden, head of Halifax Mortgages, said: “Deciding when and where to buy your first home is a deeply personal choice. While saving for a deposit and navigating higher interest rates pose a significant challenge for many prospective homeowners, life often intervenes and major milestones such as starting a new job or beginning a family can sway the decision.

“First-time buyers are often more willing to relocate to new areas in pursuit of finding the ideal home within their financial reach. This flexibility opens up a broader range of possibilities and can lead to more affordable housing options.”

Lloyds Banking Group, which Halifax is part of, recently announced “first-time buyer boost”, allowing eligible first-time buyers to borrow up to 5.5 times their household annual income, up from a multiple of 4.49 times.

Halifax’s calculations excluded cash buyers. London was also excluded when looking for Britain’s biggest first-time buyer hotspots due to its distinct market dynamics, notably significantly higher property prices compared with elsewhere in Britain, the bank said.

Here are Britain’s top first-time buyer hotspots, with the estimated percentage of first-time buyers among all mortgaged buyers in 2023, followed by the average first-time buyer house price last year, according to Halifax: