Why Wales is the hardest place to get on the property ladder ...Middle East

Wales is the least affordable part of Great Britain to become a first-time homeowner in your local area, according to a new report.

The Skipton Group, a building society, found that six out of the 10 least affordable areas of Britain were in Wales.

Its Home Affordability Index looked at 363 local authorities, comparing house prices with the incomes of potential first-time buyers in those places.

Across Great Britain, only 11.5 per cent of potential first-time buyers could afford an average deposit based on their current financial situation.

But in the two least affordable areas, Ceredigion and Powys, just 2.7 per cent of first-time buyers could afford a deposit.

Close behind were Pembrokeshire (2.9 per cent), Cardiff (3 per cent) and Vale of Glamorgan (3.1 per cent), with Wales accounting for the five least affordable areas.

How are these areas the least affordable?

The analysis compares house prices with the average incomes of potential first-time buyers in those places.

It found that nearly 40 per cent of potential first-time buyers spend over45 per cent of their income on essential housing costs.

Six of the bottom 10 least affordable local authority areas for first-time buyer affordability are in Wales – where areas score poorly because comparitive incomes in these areas are very low.

In Ceredigion – which tops the list – the average house price was £236,000, higher than the Wales average, despite the region having the seventh lowest median income in Britain, according to the report.

The other four least affordable local authority areas are split between London and the East Midlands – City of London (3.2 per cent), South Holland in Lincolnshire (3.8 per cent), Westminster (3.9 per cent) and Blaby, Leicestershire (4 per cent).

The average first-time buyer house price is just below £890,000 in Westminster – over three-and-a-half times above the national average – but the local authority area has the sixth highest median income of potential first-time buyers.

Least affordable areas for first-time buyers

In the East Midlands, the house price-to-income ratio is actually the lowest among local authority areas but the ability to get onto the property ladder is constrained by insufficient deposits. Over 80 per cent of potential first-time buyers in Blaby have insufficient deposits, Skipton said.

Stuart Haire, the building society’s chief executive, said people “might expect London and the south-east to dominate the least affordable areas for first-time buyers, so it’s shocking to see Wales feature so heavily”.

“The first step onto the property ladder remains by far the hardest, but for Welsh first-time buyers, it must feel impossible,” he told the BBC. “Our new data shows just how stark their affordability challenge is.”

Where is most affordable for a first-time buyer to live?

Nine of the ten most affordable area for first-time buyers were in Scotland.

In Aberdeen City, 31 per cent of first-time buyers could afford to get on the property ladder, followed by 28.2 per cent in Abderdeen City and 25.1 per cent in Na h-Eileanan Siar, an island off the mainland.

Manchester City was the only local authority area outside of Scotland that made the top ten, which was due to its “more favourable price-income dynamics”.

The average house price in Manchester City was lower than more than half of all local authority areas, but the average first-time buyer had a disposable income in the top 25 per cent.

A spokesperson for the Welsh Government said: “In December, we launched the extension of our Help to Buy Wales scheme which has helped more than 14,500 people who could not afford to buy a home.

“Our Self Build Wales scheme also creates opportunities for people to build homes through loan funding for land and development costs.”

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