How the typical first-time buyer mortgage payment has soared

Someone newly getting onto the property ladder can expect to pay around £400 more per month for their mortgage than five years ago, analysis suggests.

Calculations by property website Rightmove suggest the average first-time buyer mortgage payment has risen by 61 per cent since the last General Election year of 2019, from £667 to £1,075 per month.

The calculations made various assumptions, including that first-time buyers would have a 20 per cent deposit to put down, that their mortgage term would last 25 years and that they were taking out a five-year fixed-rate mortgage on an average rate.

Someone newly getting onto the property ladder can expect to pay around £400 more (Picture: John Devlin)

Rightmove also used average asking prices of a typical first-time buyer homes, with two bedrooms or fewer, for the research.

In Scotland, first-time buyers now face paying £139,198 for a home, an amount which has jumped by 22 per cent since 2019, Rightmove said.

In the north-west of England, asking prices for first-time buyer homes have jumped by a third (33 per cent) since 2019, while London has seen the smallest percentage rise of just 6 per cent over the past five years, according to the website.

Rises in mortgage rates as well as house prices have also had an impact on monthly mortgage costs. The Bank of England base rate remained on hold last week, but with Consumer Prices Index (CPI) inflation having slowed to its 2 per cent target, a base rate cut is still expected on the horizon.

Tim Bannister, Rightmove’s property expert, 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.”

The findings were released as another property website, Zoopla, found that building more affordable homes, tackling homelessness and rough sleeping and reducing the number of empty homes were ranked by people as the top housing priorities for the next government.

Ipsos research carried out for Zoopla also found that helping first-time buyers onto the property ladder and controlling rent rises in the private sector rounded out the top five.

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.”