The Cost of Getting onto the Property Ladder

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It’s no secret that getting onto the property ladder has become increasingly difficult for first-time buyers. With rising house prices and mortgage rates, the dream of owning a home seems to be slipping further and further out of reach. According to recent analysis, first-time buyers can expect to pay around £400 more per month for their mortgage than they would have five years ago.

The Numbers Behind the Headlines

The average first-time buyer mortgage payment has risen by 61% since 2019, from £667 to £1,075 per month. This staggering increase is due in part to rising house prices, with the average first-time buyer home now costing £227,757. In some areas, such as the North West of England, prices have jumped by as much as 33% since 2019.

London, with its already-high house prices, has seen the smallest percentage rise at just 6%. However, the average price tag on a first-time buyer property in London is still over half a million pounds.

The Impact of Mortgage Rates

Rises in mortgage rates have also had a significant impact on monthly mortgage costs. With the Bank of England base rate currently on hold, there is hope that a base rate cut may be on the horizon. This would be welcome news for first-time buyers, who are struggling to make ends meet.

What Can Be Done?

So, what can be done to support first-time buyers? According to Tim Bannister, property expert at Rightmove, 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. Others are turning to the government for help, with many hoping that the next government will introduce policies to support first-time buyers.

Housing Priorities for the Next Government

In fact, building more affordable homes, tackling homelessness and rough sleeping, and reducing the number of empty homes were ranked as the top housing priorities for the next government in a recent survey. Helping first-time buyers onto the property ladder and controlling rent rises in the private sector were also high on the list.

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It’s clear that voters are well aware of the pressures on the housing market, and are calling for change. With the next general election just around the corner, it remains to be seen what policies will be introduced to support first-time buyers.

Conclusion

Getting onto the property ladder is becoming increasingly difficult for first-time buyers. With rising house prices and mortgage rates, the dream of owning a home seems to be slipping further and further out of reach. However, by understanding the numbers behind the headlines and calling for change, we can work towards making homeownership a reality for all.