Rightmove have released a new study that shows how the average mortgage payment for a typical first-time buyer home over the last five years has risen from £667 per month to £1,075 per month.
Average mortgage rates during this period have risen and remain elevated, with payments for first-time buyers increasing by 61% since 2019.
The calculations made by the property website made some assumptions, including that first-time buyers would be able to put down a 20% deposit on a 25-year mortgage, and that they were taking out a five-year fixed-rate mortgage on an average rate.
For the study, Rightmove also used average asking prices of a typical first-time buyer home, with two bedrooms or fewer.
First-time buyers pay an average of £277,757 for a property – a jump of around 19% since 2019.
Asking prices for first-time buyer homes in the northwest of England have increase by 33% over the past five years, with London seeing the smallest percentage rise of just 6% since 2019.
Rightmove’s 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 or 35 years to lower monthly payments, or looking at cheaper homes for sale so that they need to borrow less.
“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.”
Elsewhere, Zoopla released the findings of their own study, revealing that tackling homelessness, building more affordable homes and reducing the number of empty homes were ranked as the top housing priorities for the next government.
More than 1,100 people were surveyed across Britain in June, with the research finding that controlling rent rises in the private sector and helping first-time buyers onto the property ladder rounded out the top five housing priorities for potential voters.
Richard Donnell, Executive Director at Zoopla, said: “British voters have high expectations from a new government on housing. The overarching response is: ’Build more homes, but other things matter too.'
“People’s experiences and priorities vary based on their position in the market. Renters want more focus on their priorities including raising housing benefit levels and managing the pace of rental growth, while also improving rights and protections.
“Rent reforms are on the agenda for all parties but managing rental inflation is best achieved by growing supply through new home building as measures to control rents can reduce new investment.
“It is clear voters are well aware of the pressures on the housing market with reducing homelessness and rough sleeping and doing more to reduce empty and under-utilised homes in the top three priorities."
