Mortgage Mayhem: How Much Are First-Time Buyers Really Paying?

The dream of owning a home is becoming increasingly out of reach for many first-time buyers in the UK. With mortgage rates on the rise and house prices skyrocketing, the average monthly mortgage payment has increased by a staggering 61% since 2019. According to calculations by property website Rightmove, a typical first-time buyer can now expect to pay around £1,075 per month for their mortgage, a significant jump from the £667 per month just five years ago.

Average house prices across the UK have risen significantly since 2019

The north-west of England has seen the largest increase in asking prices for first-time buyer homes, with a whopping 33% rise since 2019. London, on the other hand, has seen the smallest percentage rise of just 6% over the past five years, despite having the highest average house prices in the country.

London house prices remain the highest in the UK

The rise in mortgage rates has also had a significant impact on monthly mortgage costs. With the Bank of England base rate remaining on hold, many first-time buyers are looking at extending their mortgage terms to 30 or 35 years to lower their monthly payments. Others are opting for cheaper homes to reduce the amount they need to borrow.

Mortgage rates have risen significantly since 2019

According to Tim Bannister, Rightmove’s property expert, “As rates have increased over the last five years, the amount that a typical first-time buyer is paying each month on a mortgage has outstripped the pace of earning growth.” He believes that if mortgage rates reduce, this will help first-time buyers in the short-term more so than election housing promises.

First-time buyers are struggling to get on the property ladder

The findings come as another property website, Zoopla, found that building more affordable homes, tackling homelessness and rough sleeping, and reducing the number of empty homes were ranked by people as the top housing priorities for the next government. Helping first-time buyers onto the property ladder and controlling rent rises in the private sector rounded out the top five.

The top housing priorities for the next government

Richard Donnell, executive director at Zoopla, said: “British voters have high expectations from a new government on housing. The overarching response is: ‘Build more homes, but other things matter too’.” He believes that renters want more focus on their priorities, including raising housing benefit levels and managing the pace of rental growth, while also improving rights and protections.

Rent reforms are on the agenda for all parties

The survey also finds a sense that governments can affect change. With over 1,100 people surveyed across Britain, it’s clear that voters are well aware of the pressures on the housing market and are calling for action.

The housing market is under pressure