New first-time buyers are typically paying nearly £200 a month more on their mortgage than a year ago because of a combination of higher home loan rates and record asking prices for properties, new data shows.
The figures from real estate website Rightmove highlighted the difficult circumstances that prospective home buyers in the UK face. Separate data released shows that home prices have continued their upward march while average rents are reaching new highs.
According to Rightmove, a typical new first-time buyer who could come up with a 15% deposit was now spending £1,056 per month, an increase of £191 a month over what the same person would have been paying a year ago.
This is based on the average asking price for properties popular with first-time buyers, i.e. those with one or two bedrooms – which has climbed to a record level of £224,963 – combined with the average rate for a five-year fix, 85% loan-to-value mortgage spread over 25 years.
New fixed-rate deals had already started getting more expensive after interest rates began their upwards journey more than a year ago, but leapt up in the wake of last autumn’s disastrous mini-budget. This week brought evidence that the housing market may be continuing to defy those who had predicted a sharp downturn. Nationwide building society said UK house prices rose by 0.5% in April after seven months of declines, suggesting there were “tentative signs of a recovery”.