Northern delights tempt renting graduates

Young professionals who cannot afford London's soaring home prices have turned to the North to get on the property ladder and enjoy a better quality of life, says Lucy Gooding. And many of the best bargains on both fronts are in Manchester, booming in the £700m regeneration that followed the 1996 IRA bomb

With first-time buyers being priced out of the property market in the capital it is little wonder so many are heading north. Samuel Johnson famously declared "when a man is tired of London he is tired of life". But he did not live through the hard times suffered by the average first-time buyer in modern London. If he had, maybe he would be joining the growing number of young professionals deserting the capital.

It is not hard to see why. A Nationwide survey says that potential first-time buyers in the capital need to be earning £49,000 a year to be able to buy an average property, priced now at £204,000. In Manchester, a one-bedroom warehouse conversion a few minutes' stroll from the regenerated city centre's restaurants, bars and night clubs can be yours for £100,000.

Matt and Lucy Pover left London in August 2001, three and five years respectively after they had arrived in the annual influx of 10,000 new graduates. They rented since they married in 1999 but a failed flat purchase eventually drove them to pack their bags and move to Manchester. Last year, they bought a three-bedroom Sixties terrace in fashionable Chorlton cum Hardy for £107,500. Agents say it would sell now for £150,000.

Lucy, 29, a journalist, says: "We were supposed to be buying a one-bedroom flat in Upper Norwood for £100,000 but the vendor changed her mind two days before we were to complete. We were left homeless and £1,500 out of pocket and we were at our wits end.

"We couldn't face going through the process of renting for another six months while we tried to make up the shortfall in our deposit, and we'd seen on the internet how much more we could get for our money up here, so we decided to go for it.

"We rented for a few months so we could decide where we wanted to live, but even that was easier," she adds. "It was a revelation just having stairs to climb and a spare room to put people up in. We love our house; it seems so spacious after what we were used to living in, and we are in the best part of Chorlton. We would never have been able to live anywhere like this in London."

For Matt, 27, an advertising sales executive, Manchester offered the combination of career opportunities and an improved quality of life he had failed to find in the capital. "We needed to find somewhere where we could get a better standard of living without feeling like we'd sacrificed our careers," he says.

"Working in media, Manchester is probably the best place outside London to be. I've got a good job up here with a similar salary, but it goes so much further. I can drive to work in 10 minutes, we live close enough to the centre to be able to make the most of what's on offer and we have the Lake District and the Peaks on our doorstep. One day our careers may demand we go back to London, but by then we'll have a much bigger deposit and be further up the career ladder."

The Povers are by no means unique. What started out as a trickle of South-North migrants a few years ago has turned into a stampede, with estate agents reporting a flood of enquiries from fed-up Londoners. Manchester, in particular, has enjoyed a return to favour mainly thanks to a £700m regeneration after its centre was destroyed by the 1996 IRA bombing.

Selfridges now have two stores in the city, Harvey Nichols is opening soon and developers keen to cash in on the city's new "cool" status have completed more than 30 major city centre developments of loft-style apartments in the past year alone. Laura Heywood, a partner at Emma Hatton estate agent in Chorlton, says value for money is enticing young people to the city.

"At present, 30 per cent of the people registered with us are from London and the majority of those are first-time buyers," she says. "It's really taken off over the past couple of years. Before it was local professionals who moved to the area or families with young children, now it's mainly southerners. They see that for the same amount they would spend on a tiny one-bed flat in a grotty part of London they can buy a two- or three-bed Victorian terrace just a few minutes walk from the restaurants and boutiques of Chorlton Green."

Value for money and an improved quality of life were the two factors that led marketing executive, Nichola Phillips, to leave her shared flat in Ealing, west London, in favour of the peace and tranquillity of Keyworth, a village seven miles outside Nottingham. "I'd rented in London for five years, paying £450 a month for my room," she says. "I was getting to the stage where, in my mid-twenties, my career was going really well but I couldn't get past the flat-sharing stage. I was fed up with the endless travelling and I felt I was still living like a student, despite working long hours in a demanding career."

Despite a healthy annual income of £33,000, 27-year-old Nichola's singleton status meant that if she wanted to progress to homeownership in London she faced an uphill struggle of saving a hefty deposit alone, with only one income as a mortgage multiple. She decided the answer lay in moving out.

"I made up my mind that if I was going to stay in London I wanted to live somewhere nice, and that wasn't possible while I was on my own," she says. "A one-bed flat in Ealing would have cost about £160,000 and I just wasn't prepared to pay it. Once I'd made the decision there seemed no point in delaying it.

"I was lucky. My company listened when I told them I was determined to leave London and they said I could stay working for them from Nottingham. I moved in with my parents for three months while I saved the £3,000 I needed for a deposit. If I'd tried to save in London I'm convinced I would still have been renting at 30."

Nichola paid £91,000 for her 180-year-old two-bedroom cottage. She says the move has enabled her to enjoy the benefits of city living while allowing her to pursue her passion for horses. "Nottingham was perfect because it meant I could still get down to London easily for meetings but it has the things I thought I might miss about living there. There are loads of bars and restaurants and I can get into the city centre in 20 minutes by bus or car. I've got the best of both worlds; I go riding in the evenings and live in the middle of a beautiful village, with all that Nottingham has to offer right on my doorstep."

Ross Leckridge, a broker with www.Firstmortgage.co.uk, says the situation for first-time buyers in London is becoming increasingly difficult, as the amount needed for a deposit increases. "It's a very hostile environment," he says. "We are still getting enquiries from people looking for 100 per cent or more mortgages, which is a very risky business. An average one-bed flat in London now costs between £120,000 and £130,000 and for that you will need about £10,000 for a deposit and fees. That's a lot of money for the average graduate worker."

Emma Maker, spokesperson for the Halifax, agrees. "People are coming into the workforce with large student debts and are finding it much more difficult to save. Those who can are staying at home longer but others face paying out relatively high rents each month. Prices in London have escalated to such an extent that many still can't get on the ladder. It's not surprising they are moving to areas where housing is cheaper."

Even for those who have the option of living with their parents, saving in London is no mean feat. Paul Stevens,, a legal executive, lived with his parents in Watford for 18 months in a bid to save for a place of his own in the city before finally giving up and seizing the opportunity of a work-transfer to Bradford. For Paul, 28, making the decision to move north and buy his two-bedroom Victorian terraced house in Saltaire, near Bradford was one he has never regretted.

"I absolutely did the right thing. I'd been spending three hours a day travelling to and from my job in central London. Now I'm living in a World Heritage Site with easy access to Leeds and Bradford right next to the Yorkshire moors. I've even got a David Hockney gallery around the corner. There is more to life than spending hours on the Metropolitan line. I feel like an adult now."