With the news that the mortgage market is once again undergoing a period of turbulence, homeowners and first time home buyers will be increasingly concerned about affordability. Mainstream lenders have been pulling products from the market, and fixed rate deals are edging upwards yet again.
According to The Times, several high street lenders have added up to 0.85 percentage points to fixed rate deals in the past week, in response to stubbornly high inflation levels. This may not sound like a lot, but it adds almost £450 per year to the average mortgage.
As about 640,000 households are coming to the end of fixed rate deals in the next six months, this is further unwelcome news. Many people will have fixed their current mortgages in 2021 or before, when interest rates were at record lows of 0.1%. Therefore they will be facing eye watering increases of hundreds of pounds a month in their mortgage repayments.
For some, this may not be affordable on top of all the other extra pressures on household budgets. One solution may be to downsize to a smaller property, or even look to sell up and buy in a cheaper area. The average house price in the UK is £285,000, but there is marked regional variation with some areas significantly cheaper than others.
Relocating is not a practical solution for everyone, whether for family or career commitments. However, for first time buyers and those who have some flexibility in their place of work, buying in an area where house prices are lower may be a way to make home ownership more affordable. Here’s a look at the cheapest places to buy in the UK.
According to research carried out by Rightmove into major urban locations across the UK, Bradford in Yorkshire is the cheapest city to buy a typical 2-bed home. Here, average asking prices come in at £104,643. Assuming a 10% deposit and a mortgage term of 25 years, this would mean an affordable monthly repayment of about £521.
Bradford is a city that has undergone some recent regeneration projects, and is home to many sites of cultural and historical significance, such as the celebrated Saltaire model village. It is just a 30 minute drive from Leeds, and it is surrounded by some beautiful open countryside.
Carlisle in the north west of England came in a close second place, with an average asking price of £104,784. Aberdeen and Hull are not far behind, both at around £106,000. In fifth place is Dundee in north east Scotland, at £111,415.
With average rents also spiralling at the moment, it may well be worth investigating areas where it is still relatively cheap to snap up a starter home.
If you are looking for IVA mortgage advisors, please get in touch today.
Your home may be repossessed if you do not keep up with your mortgage repayments.
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