Regional differences impacting first time buyers

May2024

The journey to buying a first home isn’t the same for everyone. The challenges faced by aspiring first time buyers across the country often vary greatly, influenced by employment rates, average salaries, and awareness of support schemes.

Our most recent research clearly highlights these stark regional differences. For brokers, working these findings into the advice they offer could enhance their support to first time buyers, helping more of them step onto the ladder.

Let's unpack the findings from our research into the first time buyer economy and explore how mortgage brokers can tailor their strategies to offer the best advice possible.

Securing mortgages and funding deposits

In the North East of England, first time buyers appear to have an especially challenging time; 41% found it difficult to secure a mortgage and almost two-thirds (63%) needed to save for over three years to fund their deposit. In contrast, despite property prices that are almost 20% higher than the national average (£282,000), only 18% of first time buyers in the South West encounter similar problems.

This difficulty is partly due to a lack of awareness of available support schemes in the North, which can help fund a deposit. With scheme take-up in the North East less than half (15%) what it is in the South West (36%), there’s undoubtedly an opportunity for brokers to play a role, especially in the North, to educate clients on the financial support available to help first time buyers.

Budgeting for homeownership

In the UK, average household spending rose by just 0.7% between Q3 2022 and Q3 2023[1]. However, brokers may be surprised by regional data that reveals a more complex picture. Card spending, for example, increased at a higher level in the North East than in London and the South East, according to ONS research.[2]

In light of the help we know is needed for first time buyers in these areas, brokers who are aware of the differences in spending patterns across the regions will find themselves in the best place to advise first time buyers on repayment plans that suit different spending trends and lifestyles.

At the same time, brokers should make use of these findings with other data points. For example, we’ve seen significant changes in the value of residential development land in some parts of the country, with steep falls in the final quarter of 2023 affecting the cost of homes[3]. This includes greenfield areas in the North and land in the South East, potentially making these more affordable regions for some first time buyers.

Harnessing regional insights

The diversity of the UK's regional economies shows the importance of tailored, locally informed financial advice to help first time buyers. Indeed, tailored advice usually resonates better with buyers, builds trust, and is most helpful when trying to overcome specific challenges.

The data that makes this possible is more available than ever before, and can be leveraged with local estate agents, solicitors and valuers to form strong support networks from region to region that help entire communities turn the dream of owning a home into a reality.

For more insights, check out The First Time Buyer Economy report.