New research has suggested that Oldham is the cheapest town in the country to buy property in. Should we all move there?
Next week marks exactly 12 months since I hopped on to the property ladder. Hindsight has shown we bought at just about the perfect moment (albeit with a risk of a second batch of house price falls to come), though in truth that was more luck than judgement.
Our biggest consideration was not so much whether the property's value would jump or fall - we bought to live in it after all - but rather just how affordable the mortgage would be. The last thing you want to do is get your dream property but overstretch yourself in the process and struggle to make ends meet.
Thankfully we got that decision right.
However, a new report has now highlighted the towns that should be top of a first-time buyer's priority list, as they are the most affordable.
And unfashionable Oldham has topped the table.
Time to buy in Oldham
According to recent research,* Oldham is officially the most affordable place to snap up aproperty.
The research looked at average house prices and average mortgage rates for first-time buyers with a 25% deposit, and Oldham was easily the best bet, with an average monthly mortgage cost of £353 a month, compared to the average first-time buyer mortgage of £464 a month.
Other areas in the North West also performed well, including Salford (£374), Manchester (£375) and Bolton (£379).
No prizes for guessing the most expensive area for first-time buyers either: London, with an average monthly mortgage cost of £1,240.
£350 a month? Looks cheap!
Of course, things aren't quite as simple as the figures suggest. For a start, precious few first-time buyers enter the property market with a 25% deposit - I know I certainly didn't. Most first-time buyers are extremely lucky to have anything more than a deposit of 10%.
And while the mortgages for those with a smaller deposit are beginning to look a bit more attractive (as Christina Jordan explains in Hope at last for first-time buyers), they are still markedly more expensive than those with 25% deposits.
So it still pays to have as big a deposit in place as possible. That's why, if you're looking to take your first step onto the property ladder, you might want to follow some of the hints and tips in our goal: Build up your savings.
The North/South myth
The immediate response for many when seeing the results will be to turn straight to the North/South divide. Houses are always cheaper in the North than they are in the South, just as wages and the cost of living are also lower, right?
That's all a bit simplistic though, as the research itself establishes. Salford and Manchester may be particularly affordable for example, but travel a few miles down the road to Trafford and watch your repayments rocket up to £694.
That's a distance of just over three miles - a fifteen minute drive at the most - and yet your mortgage repayments are double, every month.
Location, location, location
There are all sorts of factors that will influence the price of your property - and therefore the size of your mortgage repayments - besides simply whether the house is in the North or the South.
One factor that has affected for Oldham is unemployment. While the number of Oldham residents claiming Jobseekers Allowance is falling, it still totalled just short of 7,000 in November. And according to a new report for the local council, it may be another 18 years before jobless figures in the town return to pre-credit crunch levels.
Oldham also doesn't exactly benefit from vast wages - a couple of years ago the union GMB named the town as the worst paid in all of England, with an average salary of just £22,127. By contrast, in the same piece of research Trafford came above the North West average, with an average salary of nearly £30,000.
Oldham is also a town with high crime rates, with burglaries and car theft both above the national average, according to research by mouseprice.com.
So while it may be the cheapest place to buy your first property, that certainly doesn't make it the best.
Doing the sums
Whether you are a first-time buyer or have been on the property ladder a while, getting the maths right when buying a home and sorting out a mortgage is hugely important. Luckily, lovemoney.com has a very useful mortgage calculator which makes clear exactly how much you are going to be set back each month which I'd recommend having a play around with.
I'm also a big fan of using a broker, particularly if you are buying for the first time. I did, and he was incredible not just in sorting out the best mortgage for my wife and I, but also in outlining just how much owning a home would set us back each month in non-mortgage costs.
I detailed my experiences in Why it is better to go to a mortgage broker, while lovemoney.com operates our very own fee-free mortgage brokerage service, who should be able to help clear up any questions you might have.
Get help from lovemoney.com
If you are about to buy a property, there are loads of ways lovemoney.com can help.
First up, have a look at some of the hints and tips in this goal: Cut your mortgage costs and pay off your mortgage early
Next, check out this video: The best three-year tracker mortgage around
Finally, if you have any questions that need answering on the housebuying process, why not see if your fellow lovemoney.com users can help over in our Q&A section.
*Research was conducted by realpricecomparison.com
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