First-Time Buyer Affordability Improves Across the Country

The dream of homeownership has felt distant for many over the past few years, but the latest research from Nationwide suggests the tide may be turning.

According to the building society's most recent affordability report, homes have become more affordable for first-time buyers in around 70% of local authority areas, a welcome shift that could encourage more people to take their first step onto the property ladder. For those looking to buy in and around Rugby, this is encouraging news. The Midlands has long occupied a middle ground in the national affordability picture, more accessible than London and the South East, yet still subject to the same broader pressures of rising house prices and mortgage rates that have affected the entire country.

What the numbers tell us

Nationwide's analysis paints a picture of gradual but meaningful improvement. A prospective buyer earning the average UK income and purchasing a typical first-time buyer property with a 20% deposit would now spend roughly 32% of their take-home pay on mortgage repayments. That figure sits only slightly above the long-run average of 30%, and is a world away from the peak of 48% recorded back in 1989.

The first-time buyer house price to earnings ratio has also fallen to 4.7, dipping just below its 20-year average. This is a continuation of a trend that has been building over recent years, driven largely by earnings growth outpacing house price increases and a steady decline in mortgage rates. In real terms, it means saving for a deposit has become a little less daunting than it was even twelve months ago.

Activity levels reflect this shift. First-time buyer purchases over the past year were around 20% higher than in 2024, and the share of high loan-to-value lending, mortgages with a deposit of 15% or less, has reached its highest level in over a decade. Lenders, it seems, are increasingly willing to back buyers with smaller deposits, which removes one of the most significant barriers to getting on the ladder.

Regional variation remains significant

While the overall direction of travel is positive, there are still stark differences depending on where you are looking to buy. London remains the least affordable region by a considerable margin, with a house price to earnings ratio of 7.5. A 10% deposit on a typical first-time buyer property in the capital is more than three times larger than the equivalent in the North of England, and it would take a Londoner roughly nine years to save that amount, compared to around four years for someone buying further north.

At the other end of the scale, areas such as Inverclyde, Burnley and Hartlepool rank among the most affordable in the country. Scotland, too, stands out as a region where affordability is relatively healthy, the incomes of actual first-time buyers there are actually below the regional average, suggesting that homeownership is genuinely within reach for a broad cross-section of earners.

For buyers in Warwickshire and the surrounding area, the picture sits somewhere between these extremes. The Midlands has consistently shown that the incomes of actual first-time buyers tend to be much closer to regional averages than in London, where buyers typically earn around 45% more than the local norm just to get a foot in the door. This suggests that our local market remains relatively accessible compared to the overheated corners of the South East.

The deposit challenge

Across the UK, a 10% deposit on a typical first-time buyer property currently stands at around £23,000. Nationwide's research suggests that saving 10% of average net pay each month, roughly £320, would mean it takes nearly six years to accumulate this sum. In more than half of all local authority areas, a 10% deposit falls between £10,000 and £25,000, which is a more manageable range than many might expect.

That said, saving any significant sum remains a challenge for many, particularly for those renting privately. Rental increases in recent years have eaten into the capacity of would-be buyers to set money aside, and it is perhaps no surprise that over a third of first-time buyers in 2024/25 relied on some form of help from family or friends to raise their deposit, whether through a gift, a loan, or an inheritance.

For those in our town and its surrounding villages, it is worth bearing in mind that deposit requirements can vary noticeably even within a single region. Talking to a mortgage adviser early in the process, ideally before you begin viewing properties, can give you a much clearer sense of what is realistically within your reach and help you move quickly when the right property comes along.

Affordability and occupation

One of the more detailed aspects of Nationwide's research examines how affordability varies across different professions. Unsurprisingly, those in managerial and professional roles find it easiest to manage mortgage payments relative to their income, while those working in sales, customer service and so-called elementary occupations, including construction labourers, cleaners and couriers, face the greatest squeeze, with typical mortgage payments representing around 50% of take-home pay.

All occupational groups have seen some improvement over the past year, with the biggest gains for those in caring, leisure and other service roles, where earnings growth has been strongest. It is a reminder that affordability is not just a function of house prices and interest rates, but is deeply tied to what people earn and how that changes over time.

What lies ahead

Looking forward, Nationwide expects housing market activity to strengthen a little further as affordability continues to improve gradually. The combination of income growth outpacing house price increases and a further modest decline in interest rates should continue to support demand, particularly among first-time buyers.

Industry voices have offered a cautiously optimistic reading of the data. Mary-Lou Press, President of NAEA Propertymark, acknowledged the positive direction while noting that significant regional disparities remain, particularly in London and the South East. Tom Bill, Head of UK Residential Research at Knight Frank, pointed to a longer-term trend of buyers finding better value outside the capital, aided in part by major employers establishing regional operations.

For buyers in Rugby and across Warwickshire, the message is broadly hopeful. Affordability is moving in the right direction, lending conditions are more favourable than they have been for some time, and the local market continues to offer a more balanced proposition than many parts of the country. If you have been waiting for the right moment to explore your options, this could be a good time to take that first step.

At Ellis Brooke, we have over 30 years of combined experience in helping buyers navigate the local property market, from that very first viewing through to collecting the keys. If you would like to discuss your buying plans or simply want to understand what is available in your price range, our team is always happy to help.