First-time buyers can afford more homes across a greater spread of locations due to the pandemic, according to research from reallymoving.
But the house moving quotes service adds that while the volume of FTBs in the market has increased across the country, in the capital this group of buyers has fallen from a peak of 20.6% in February 2020 to 16.8% – a decline of almost one fifth.
The survey found that a FTB with a £25,000 deposit and an income of £40,000 has a greater range of homes available to them within an hour’s commute of London, as firms prepare to shift to more remote working patterns following the health crisis.
A new buyer with a sizeable deposit and good income could afford to buy 36.5% of properties in Swindon, 29.5% in Colchester and 19% in Luton.
This buyer could also afford 15.5% of homes in Crawley and 14% in Milton Keynes, to complete London’s top five most affordable commuter locations.
By contrast, a FTB with a £25,000 deposit and an income of £40,000, could only afford 5% of properties in the capital.
Reallymoving points to a London Chamber of Commerce and Industry survey last month, where half of the firms in the capital said they plan to continue remote working permanently in some capacity.
It says this means, “London’s FTBs are able to access locations further from the capital where they benefit from greater affordability”.
The house moving service firm adds, last month’s move by the UK’s largest building society, Nationwide, to boost its income multiples allowing FTBs to borrow up to 5.5 times their annual earnings, up from 4.5 times, “has had a significant impact on affordability”.
It says in Swindon, the proportion of homes available to new buyers has increased by 13.5% to half the market, compared to London where the proportion of homes within reach of FTBs rises from 5% to just 8.5%.
Reallymoving chief executive Rob Houghton says: “No longer tied to living in the capital or crippled by daily commuting costs, First Time Buyers might be surprised to find that they can access a sizeable proportion of the market in several popular locations within an hour of the capital – and are more likely to be able to afford a garden and larger living space.
“Anyone taking out a large mortgage should consider the risks carefully, but for many young professionals with good prospects – and with lender affordability checks being applied diligently – larger loans make sense and are particularly helpful to those buying on their own.
“The bright lights of London will always be a draw but with house prices so high and continuing to rise, and with saving for a deposit a huge challenge, having the freedom to access a greater choice of location will make a big difference to those trying to get on the housing ladder.”
