First-Time Buyers in Britain Face Significant Increase in Mortgage Payments
A recent analysis reveals that average mortgage payments for new buyers have risen by £350 monthly over the past five years.
According to analysis conducted by a property website, first-time buyers in Britain now face significantly higher mortgage payments compared to five years ago.
Currently, a typical first-time buyer is paying an average of £940 per month for their mortgage, up from £590 per month recorded five years earlier.
Despite this increase, the current monthly payments are £155 lower than the peak observed in July 2023.
The calculations were based on average asking prices for properties suited for first-time buyers and prevailing mortgage rates.
The analysis assumes that a first-time buyer is purchasing a property with two bedrooms or fewer, with a 20% deposit, and amortizing the mortgage over a period of 30 years.
The average cost of a first-time buyer home is reported to be £226,887.
For buyers looking for more affordable options, Kilmarnock in East Ayrshire, Scotland, has been identified as the least expensive area to enter the housing market, with an average asking price of £84,325 for a typical first-time buyer home.
This was followed by Greenock in Inverclyde at £88,862 and Grimsby in Lincolnshire at £93,427.
Recent wage growth in the UK is reported to have outpaced the increase in property prices for first-time buyers.
Average earnings have risen by 30% over the last five years, while the price of typical first-time buyer properties has increased by 17%, according to Office for National Statistics figures.
Experts suggest that rising mortgage rates necessitate careful consideration of affordability on the part of home movers, with buyers needing to evaluate their ability to meet monthly mortgage payments, regardless of whether they can afford the asking price of a home.
The Financial Conduct Authority (FCA) has announced it is looking into streamlining mortgage regulations, which may assist buyers in obtaining mortgages.
In addition, a list of the ten least expensive locations for first-time buyers has been compiled, detailing the average asking prices along with year-on-year changes in prices:
1. Kilmarnock, Ayrshire, £84,325, decrease of 1.0%
2. Greenock, Inverclyde, £88,862, increase of 0.7%
3. Grimsby, Lincolnshire, £93,427, decrease of 1.2%
4. Blackpool, Lancashire, £93,711, no change
5. Middlesbrough, Tees Valley, £95,473, increase of 0.8%
6. Hartlepool, Tees Valley, £99,525, increase of 10.7%
7. Paisley, Renfrewshire, £99,570, increase of 2.3%
8. East Kilbride, Glasgow, £100,814, increase of 4.1%
9. Ayr, Ayrshire, £101,391, increase of 1.0%
10. Burnley, Lancashire, £102,848, increase of 6.2%.
Currently, a typical first-time buyer is paying an average of £940 per month for their mortgage, up from £590 per month recorded five years earlier.
Despite this increase, the current monthly payments are £155 lower than the peak observed in July 2023.
The calculations were based on average asking prices for properties suited for first-time buyers and prevailing mortgage rates.
The analysis assumes that a first-time buyer is purchasing a property with two bedrooms or fewer, with a 20% deposit, and amortizing the mortgage over a period of 30 years.
The average cost of a first-time buyer home is reported to be £226,887.
For buyers looking for more affordable options, Kilmarnock in East Ayrshire, Scotland, has been identified as the least expensive area to enter the housing market, with an average asking price of £84,325 for a typical first-time buyer home.
This was followed by Greenock in Inverclyde at £88,862 and Grimsby in Lincolnshire at £93,427.
Recent wage growth in the UK is reported to have outpaced the increase in property prices for first-time buyers.
Average earnings have risen by 30% over the last five years, while the price of typical first-time buyer properties has increased by 17%, according to Office for National Statistics figures.
Experts suggest that rising mortgage rates necessitate careful consideration of affordability on the part of home movers, with buyers needing to evaluate their ability to meet monthly mortgage payments, regardless of whether they can afford the asking price of a home.
The Financial Conduct Authority (FCA) has announced it is looking into streamlining mortgage regulations, which may assist buyers in obtaining mortgages.
In addition, a list of the ten least expensive locations for first-time buyers has been compiled, detailing the average asking prices along with year-on-year changes in prices:
1. Kilmarnock, Ayrshire, £84,325, decrease of 1.0%
2. Greenock, Inverclyde, £88,862, increase of 0.7%
3. Grimsby, Lincolnshire, £93,427, decrease of 1.2%
4. Blackpool, Lancashire, £93,711, no change
5. Middlesbrough, Tees Valley, £95,473, increase of 0.8%
6. Hartlepool, Tees Valley, £99,525, increase of 10.7%
7. Paisley, Renfrewshire, £99,570, increase of 2.3%
8. East Kilbride, Glasgow, £100,814, increase of 4.1%
9. Ayr, Ayrshire, £101,391, increase of 1.0%
10. Burnley, Lancashire, £102,848, increase of 6.2%.
