House prices

First-time buyer prices and rents jump as mortgage costs rise 22%

Characterful terraced houses on Park Parade facing Jesus Green in the city of Cambridge, UK.  First-time <a class=home buyers are facing average monthly mortgage payments 22% higher than two years ago. Photo: Getty” src=”https://s.yimg.com/ny/api/res/1.2/32B2Pl.kZKPvqZ8Z14ChQw–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTY1OQ–/https://s.yimg.com/os/creatr-uploaded-images/2022-07/435a31c0-09d2-11ed-b93f-49f2206d2ab5″/>

First-time home buyers are facing average monthly mortgage payments 22% higher than two years ago. Photo: Getty

First-time buyer prices and rents jumped three times faster than before the pandemic, with asking prices up £17,557.

The average price of a first-time buyer property has hit a new record high in Britain of £224,943, analysis by property site Rightmove has revealed.

This means that an average 10% deposit required now stands at £22,493. That’s £2,560 more than two years ago when the deposit required was £19,934. Between July 2018 and July 2020, the deposit needed for an average first home only increased by £807.

Average asking prices for first-time buyer properties – two bedrooms or less – have increased by 13% or £17,557 since July 2020, compared to 4% or £8,069 between July 2018 and July 2020.

For potential first-time buyers looking to save while renting, record rents are rising at the fastest rate on record.

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Average monthly rents are 17%, or £128, higher nationally than two years ago. National average earnings increased by 14% over the same period.

“Our affordability analysis highlights the many challenges first-time buyers are trying to navigate right now. For potential first-time buyers trying to save a down payment, they’re chasing a rapidly changing goal as prices average asking prices for homes for first-time buyers hit a new high and are growing faster than before the pandemic,” said Tim Bannister of Rightmove.

For new first-time buyers who were able to save a down payment, secure a mortgage and secure a property, they now face average monthly mortgage payments 22% higher than two years ago, due to rising house prices and interest rates.

Monthly mortgage payments for a new first-time buyer based on the current average rate are £976 – £173 more than two years ago. Average monthly mortgage payments have only increased by £41 over the previous two years.

“For those who cannot live with their parents or family members while saving, they also have to manage paying record rents in and out of London,” Bannister said.

Read more: Rising house prices continue to fuel UK property boom

“We understand how difficult this challenge can be, and something we’ve seen more and more over the past couple of years, particularly with the spread of working from home, is people looking further afield or in a more different areas when looking to move, to see what is available within their budget.

In a recent Rightmove survey aimed at identifying the current attitudes of movers, those considering buying their first home said that rising house prices and soaring energy bills are the biggest challenges they face. are currently facing.

Almost half (43%) hope to be able to save enough to buy in the next three years, with two-thirds already starting to save each month for their deposit.

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