Mortgage Watch: The Alarming Rise in First-Time Buyer Mortgage Costs

As a first-time buyer, getting on the property ladder can be a daunting task. With rising house prices and increasing mortgage rates, the dream of owning a home seems to be slipping further away. According to recent research by property website Rightmove, the average first-time buyer mortgage payment has risen by a staggering 61% since 2019, from £667 to £1,075 per month.

The UK housing market is becoming increasingly difficult for first-time buyers.

To put this into perspective, a 20% deposit on a two-bedroom property would cost around £45,000, and with mortgage rates on the rise, the monthly repayments would be substantial. This has led to many first-time buyers considering longer mortgage terms or looking at cheaper homes to reduce their borrowing.

“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.

Regional Variations

The north west of England has seen the largest increase in asking prices for first-time buyer homes, with a 33% rise since 2019. London, on the other hand, has seen the smallest percentage increase of just 6%. However, the average price tag on a first-time buyer property in London is still over half a million pounds.

Regional housing prices are varying greatly across the UK.

What’s Next for First-Time Buyers?

With the Bank of England’s base rate remaining on hold, a rate cut is still expected in the near future. This could bring some relief to first-time buyers. However, it’s clear that more needs to be done to support them.

“We hope that the next government can 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.” - Tim Bannister.

According to a survey by Zoopla, building more affordable homes, tackling homelessness, and reducing the number of empty homes are top priorities for the next government.

Housing priorities for the next government.

As a first-time buyer, it’s essential to stay informed about the changing mortgage market and to explore all available options. Whether it’s extending mortgage terms, looking at cheaper homes, or saving for a larger deposit, every little bit counts.

Mortgage calculators can help first-time buyers plan their finances.

In conclusion, the rise in first-time buyer mortgage costs is a pressing issue that needs to be addressed. With the right policies and support, we can make the dream of owning a home a reality for many more people.