Average first-time buyer mortgage payments have risen by 61 per cent since the last election year of 2019, research from Rightmove has found.
Rightmove’s latest first-time buyer study, found over the past five years the average mortgage payment for a typical first-time buyer home has risen from £667 per month to £1,075 per month.
The research attributed this rise to average mortgage rates rising and remaining elevated.
This increase in mortgage payments has “significantly” outpaced wage growth as, over the same five-year period, average wages increased by just 27 per cent.
Rightmove property expert, Tim Bannister, said: “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.
“Some first-time buyers are looking at extending their mortgage terms to 30 to 35 years to lower monthly payments, or looking at cheaper homes for sale so that they need to borrow less.”
The average first-time buyer home was found to now cost £227,757, up 19 per cent since 2019.
However, this rise was not uniform across the country with the north west seeing the biggest jump in first-time buyer prices at 33 per cent since 2019, while London has seen the smallest rise of just 6 per cent in five years.
Bolsover in the West Midlands tops the list at a 55 per cent rise in average asking prices.
Following its survey findings, Rightmove suggested that a Bank of England rate cut will have the most immediate benefit for those trying to get onto the ladder, should it, as expected, lead to lower mortgage rates.
Rightmove stated that its “key ask” of the next government is that they prioritise long-term solutions and policies to help more first-time buyers onto the ladder, over short-term policies that only help very small groups of people.
Bannister added: “If mortgage rates reduce, this will help first-time buyers in the short term more so than election housing promises.
“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.”
tom.dunstan@ft.com
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