Mortgage Squeeze Hits Swindon: House Prices Rise Despite Slowing Sales
The average house price in Swindon for first-time buyers has risen by a fifth over the past five years, new figures show. This comes as property experts warn that the typical mortgage payment for first-time buyers has increased by £400 a month.
Houses for sale in Swindon
According to the Land Registry’s house price index, first-time buyers in Swindon were paying an average of £222,200 for a house in April. This is up 20% from an average of £185,600 five years earlier. Overall house prices in Swindon have also jumped 20% over five years, reaching £258,100 in April 2024.
“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.” - Tim Bannister, Rightmove’s property expert
Some first-time buyers are looking at extending their mortgage terms to 30 or 35 years to lower monthly payments, or looking at cheaper homes for sale so that they need to borrow less.
Mortgage rates
The property website Rightmove is calling on the next government to support first-time buyers with well thought-out policies, which address the difficulties of saving up a large enough deposit and being able to borrow enough from a lender.
“The potential of home ownership should never be a prospect that is ever out of reach for people.” - Nathan Emerson, chief executive of Propertymark
The most recent Land Registry figures also show a significant drop in housing sales compared to five years prior, with over 26,600 sales across Great Britain in February this year compared to 66,000 the same month in 2019. In Swindon, there were 74 sales in February this year - down from 233 five years earlier.
Housing sales
The average UK house price rose by 0.2% month on month in June, as high mortgage rates continued to hold back buyer activity, according to a report by Nationwide Building Society. The modest monthly growth leaves the average price of a house in the UK at £266,064, up 1.5% on the same time last year.
“While earnings growth has been much stronger than house price growth in recent years, this hasn’t been enough to offset the impact of higher mortgage rates, which are still well above the record lows prevailing in 2021 in the wake of the pandemic.” - Robert Gardner, Nationwide’s chief economist
For example, the interest rate on a five-year fixed-rate mortgage for a borrower with a 25% deposit was 1.3% in late 2021, but in recent months this has been nearer to 4.7%.
Mortgage rates
As a result, housing affordability is still stretched. Today, a borrower earning the average UK income buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 37% of take-home pay - well above the long-run average of 30%.
