‘Most and least affordable’ parts of Britain for first-time buyers revealed

David Fell, lead analyst at Hamptons, said: “Increases in mortgage rates since late 2022 have squeezed affordability across the South of England particularly acutely.

“Here, new buyers tend to borrow higher multiples of their earnings to get onto the housing ladder because house prices are higher.

“The rise in mortgage rates during the second half of 2022 increased mortgage repayments by more than the previous 10 years of house price growth.

“Stretched affordability has kept house prices firmly in check across London and the South East, particularly the values of homes bought by first-time buyers.

“Many flats are changing hands for the same prices that were paid a decade ago—a real-terms fall in value of 30–40% after adjusting for inflation.

“However, flatlining prices have made it harder for yesterday’s first-time buyers to trade up to a larger home whose value may have risen by 20–30% over the same period.

“If sustained, the recent uplift in mortgage rates is likely to provide a further drag on both affordability and house prices in more expensive markets.”