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First-time buyers face paying £350 more per month on average for their mortgage than they would have done five years ago, analysis by a property website indicates.
A typical first-time buyer in Britain faces paying a mortgage of £940 per month, compared with £590 per month five years ago, according to calculations by Rightmove.
But the website said monthly mortgage payments are still £155 lower than a peak seen in July 2023.
Rightmove looked at average asking prices for first-time buyer properties and mortgage rates to make the calculations.
It assumed that first-time buyers were purchasing a property with two bedrooms or fewer and that a first-time buyer would have a 20 per cent deposit to put down and be spreading the cost of the mortgage over 30 years.
Rightmove added that average wage growth in recent years has outpaced the rise in average asking price for a typical first-time buyer property.
Average earnings have grown by 30 per cent in the last five years, versus a 17 per cent increase in the price of a typical first-time buyer home, according to its analysis, which included looking at Office for National Statistics (ONS) figures.
This has slightly increased the borrowing power of first-time buyers who can typically borrow 4.5 times their salary from a mortgage lender, according to the website.
However, affordability remains stretched, particularly in London, the country’s most expensive region where the average starter home price is just over £500,000.
This is 13.5 times the average loan-to-income for a single buyer and 6.8 times the national average wage for a dual income household. By comparison in the North East a starter home costs just 1.8 times that amount. The data does not take into account wage variation throughout the country.
The national average price tag for a first-time buyer home is currently £226,887, the website said.
For first-time buyers who may be considering lower-priced areas that they can move to, Kilmarnock in East Ayrshire, Scotland, was identified by Rightmove as the least expensive area for a buyer to get onto the property ladder typically.
The average asking price for a typical first-time buyer home in Kilmarnock is £84,325. Greenock in Inverclyde, Scotland, was placed second on the list at £88,862, and Grimsby in Lincolnshire was ranked third at £93,427.
Rightmove’s mortgage expert Matt Smith said: “Higher mortgage rates mean home movers need to consider how much they can afford to pay each month on a monthly mortgage, even if they can meet the asking price of a home.
“Another measure of affordability which is restricting some first-time buyers from getting onto the ladder is how much they can borrow. It’s encouraging to see that the regulator is considering how they may be able to enable first-time buyers to borrow more in a responsible way, as we think this will help to unlock more opportunity, particularly for those with smaller deposits.”
The Financial Conduct Authority (FCA) recently said it is looking into simplifying mortgage rules, which could help home buyers to secure a property.
The least expensive locations for first-time buyers:
1 Kilmarnock, Ayrshire, £84,325
2. Greenock, Inverclyde, £88,862
3. Grimsby, Lincolnshire, £93,427
5. Middlesbrough, Tees Valley, £95,473
6. Hartlepool, Tees Valley, £99,525
7. Paisley, Renfrewshire, £99,570
8. East Kilbride, Glasgow, £100,814
9. Ayr, Ayrshire, £101,391
10. Burnley, Lancashire, £102,848
