House prices and rental costs soar thanks to a blend of countryside views and transportation links
While the pandemic and the rise of remote working killed off the nightmare that is commuting for many people, for some city professionals travelling into the office is a daily must. According to research from The Standard, around 900,000 individuals commute into London daily for work – enticing many to look at buying homes in rural towns with good transportation links.
One such town that’s risen in prominence over the past few years is Stevenage. Situated just 20 minutes from King’s Cross by fast train, the town has become a magnet for first-time buyers and investors seeking a balance of affordability and connectivity – something of a commuter’s dream. Speaking to Mortgage Introducer, Renuka Phadke (pictured), mortgage and protection advisor at V R Mortgage Solutions Ltd, has a front-row seat to the evolving housing trends that’s reshaped her hometown.
A commuter’s dream?
“Stevenage is now very close to London,” Phadke told Mortgage Introducer. “A lot of people are moving outside London now, obviously, for affordability.”
The town’s appeal lies in its accessibility and relative affordability, especially compared to the skyrocketing costs of properties within London. Phadke highlighted how this has transformed the town into a hotspot for young professionals eager to step on to the property ladder.
“The first-time buyer options remain popular,” she explained. “A lot of youngsters are coming out into the market. Even though they have a handsome salary, the deposit is quite a constraint for them to buy the property in London. Stevenage is giving them quite an ideal location where they can get to King’s Cross in 20 minutes. With that, it’s increasing the popularity of Stevenage and the number of first-time buyers, really.”
‘The buy-to-let mortgage market has grown in demand’
The rental market has also flourished alongside the surge in demand for first-time buyer homes, driven by an influx of commuters. As of October 2024, the average monthly private rent in Stevenage was £1,327, marking a 12.5% increase from £1,180 in October 2023 - with detached properties averaging £1,735 per month, semi-detached properties at £1,285, terraced houses at £1,289, and flats or maisonettes at £1,023. And buy-to-let is no exception here.
“The buy-to-let mortgage market has grown in demand in this area,” Phadke noted. “Investors are recognising the rental potential in Stevenage, because, again, a lot of commuters are moving outside London.”
The growing demand has also contributed to rising property values in Stevenage and its neighbouring towns. Phadke pointed out: “Towns like Stevenage, Hatfield, Welwyn Garden City, or St. Albans are picking up. The house prices are going up in this area in a way, and that’s what is pushing the rental market as well.”
And, when it comes to mortgage preferences, fixed-rate products are the clear choice for many buyers.
“Fixed rates have become increasingly popular due to their predictability and stability,” added Phadke. “While the base rate may remain steady for the time being, expectations for a reduction later this year remain uncertain. Many anticipate a possible drop by February. As a result, clients are leaning toward fixed rates to avoid potential fluctuations in tracker rates and gain financial security.”
‘There’s a common myth that self-employed individuals face more challenges’
For self-employed clients, however, it can be a different story. Research from The Landing Channel found that 24% of self-employed applicants have experienced mortgage rejection, compared to 12% of employed applicants. However, Phadke was quick to dispel any harmful misconceptions here.
“There’s a common myth that self-employed individuals face more challenges when applying for a mortgage,” she said. “As long as they have accurate financial records, such as bank statements and tax returns, showing their affordability and creditworthiness, they are in a similar position to employed applicants. For clients with varied or non-traditional income sources, I can help explore specialist mortgage options. It’s important to provide clear and accurate documentation for all income streams so that lenders can properly assess the application.”
However, clients with non-traditional income sources may encounter additional hurdles. Phadke explained: “That will fall into the specialist mortgage stream, where you have to have all the avenues and areas from where you are generating the income. There are lenders available who may take that into consideration.”
Economic pressures, including inflation, have also driven more clients to explore refinancing. The UK inflation rate was 2.6% in November 2024, up from 1.7% just a couple of months ago. Here, Phadke highlighted the importance of reassessing financial goals to navigate these pitfalls.
“With the recent economic pressures, I obviously stress on assessing the financial goals of the client, assessing their current mortgage term, and overall their mortgage affordability,” she said.
And while equity release is outside her purview, Phadke acknowledged its potential for homeowners feeling the financial strain.
“Equity release is a specialist field of mortgages,” she noted, urging caution for those considering it. “I strongly recommend them to consider the future implications, like inheritance tax and the interest growth.”
For Phadke, Stevenage’s market is in flux, shaped by affordability pressures and shifting priorities – with the town’s recent transformation signifying broader trends in how buyers and investors are responding to the challenges of the housing market.
“A lot of people are moving outside London,” she said. “That’s why towns like Stevenage are becoming so popular.”
