Mortgage Payments Skyrocket for First-Time Buyers

As a first-time buyer, getting onto 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 and further away. According to recent analysis, the average first-time buyer mortgage payment has risen by a staggering 61% since 2019, from £667 to £1,075 per month.

The cost of getting on the property ladder

This significant increase is largely due to the rise in mortgage rates, as well as house prices. In London, the average price tag on a first-time buyer property is over half a million pounds, making it even more challenging for individuals to get their foot on the ladder.

Across Britain, first-time buyers now face paying £227,757 for a home, an amount that has jumped by nearly a fifth (19%) since 2019. The north-west of England has seen the largest percentage rise, with asking prices for first-time buyer homes jumping by a third (33%) since 2019.

The Impact of Rising Mortgage Rates

Rising mortgage rates have had a significant impact on monthly mortgage costs. With the Bank of England base rate remaining on hold, a base rate cut is still expected on the horizon. This could provide some relief for first-time buyers, who are struggling to keep up with the increasing costs.

Mortgage rates on the rise

Tim Bannister, Rightmove’s property expert, notes that “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.” This has led some first-time buyers to consider extending their mortgage terms to 30 or 35 years to lower monthly payments, or looking at cheaper homes for sale to reduce the amount they need to borrow.

The Importance of Affordable Housing

The findings of this analysis highlight the need for more affordable housing options. With the next General Election approaching, housing priorities are at the forefront of many voters’ minds. According to a survey by Zoopla, building more affordable homes, tackling homelessness and rough sleeping, and reducing the number of empty homes are ranked as the top housing priorities for the next government.

The need for affordable housing

Richard Donnell, executive director at Zoopla, notes that “British voters have high expectations from a new government on housing. The overarching response is: ‘Build more homes, but other things matter too’.” With the housing market under pressure, it is clear that voters are aware of the need for change.

Conclusion

The rising cost of mortgage payments is a significant barrier for first-time buyers. With house prices and mortgage rates on the rise, it is becoming increasingly difficult for individuals to get onto the property ladder. As the next General Election approaches, it is clear that housing priorities need to be addressed. By providing more affordable housing options and supporting first-time buyers, we can work towards making the dream of homeownership a reality for all.