Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

North of England Offers Best Value for First-Time Buyers, Analysis Finds

First-time buyers in parts of the North of England could save hundreds of pounds a year by purchasing a property rather than renting, according to analysis by Pepper Money. The study, based on Office for National Statistics (ONS) data, highlights that 41% of 187 locations analysed across England and Wales are cheaper to buy than rent.

Pepper Money’s index found that Middlesbrough offers the best value for first-time buyers, with an average property price of £123,831 and estimated mortgage payments of £607 per month. This represents a potential saving of around £157 per month compared to renting. Burnley ranked second, with the lowest average house price among the areas analysed at £115,953 and an estimated monthly saving of £114 for buyers.

Other top locations for first-time buyer value include Merthyr Tydfil, Cumberland, and County Durham. The North East region performed particularly well, with every area except Northumberland showing lower average mortgage payments than local rents. In the North East, average mortgage payments were £699 per month, compared to a national average of £1,310, and average property prices were just under £143,000.

The North West also presented opportunities for buyers, with 69% of areas offering cheaper mortgages than rents. Manchester and Salford were highlighted as notable examples, where buyers could save more than £3,000 a year due to relatively high rents, despite average house prices of £232,888 and £204,756 respectively. Southampton was identified as the location with the largest potential saving among the top 10, at £327 per month, or £3,924 per year.

Pepper Money’s analysis considered factors such as earnings, house prices, rent-to-mortgage costs, mortgage affordability, and deposit accessibility. Mortgage costs were modelled using a 5.13% interest rate, a two-year fixed term, a 30-year mortgage, and a 10% deposit.

The findings suggest that, despite broader affordability pressures, first-time buyers may find better value by considering areas outside the UK’s most expensive housing markets. This information may be relevant for letting agents and inventory clerks monitoring regional trends in rental and purchase affordability.