First-time buyers paying extra £4,200 a year on their mortgage

First-time buyers in the UK are facing paying an extra £4,200 a year on their mortgage with increased mortgage payments, which now average £940 per month compared to £590 five years ago, according to latest Rightmove research.

The data showed that the average price for a first-time buyer home currently stands at £226,887. The analysis also shows that average wage growth has outpaced the rise in property prices, with earnings increasing by 30% compared to a 17% rise in home prices.

The data, however, noted that current monthly mortgage payments are still £155 lower than the peak seen in July 2023.

The website’s calculations were based on average house prices for properties suitable for first-time buyers and current mortgage rates. It was assumed that first-time buyers were purchasing a two-bedroom or smaller property, had a 20 percent deposit, and were spreading the cost of the mortgage over 30 years. The current average price tag for a first-time buyer home is £226,887, according to Rightmove.

For those looking to move to less expensive areas, Rightmove identified Kilmarnock in East Ayrshire, Scotland, as the least costly area for first-time buyers, with an average asking price of £84,325. Greenock in Inverclyde, Scotland, came second at £88,862, followed by Grimsby in Lincolnshire at £93,427.

Rightmove also highlighted that average wage growth in recent years has outpaced the rise in average asking prices for typical first-time buyer properties.

Rightmove’s Property Expert, Matt Smith said “Higher mortgage rates mean home movers need to consider how much they can afford to pay each month on a monthly mortgage, even if they can meet the asking price of a home.

“Another measure of affordability which is restricting some first-time buyers from getting onto the ladder is how much they can borrow. It’s encouraging to see that the regulator is considering how they may be able to enable first-time buyers to borrow more in a responsible way, as we think this will help to unlock more opportunity, particularly for those with smaller deposits.”

The least expensive locations for first-time buyers according to Rightmove, with the average asking price for a typical first-time buyer home, followed by the average asking price increase or decrease year-on-year:

1. Kilmarnock, Ayrshire, at £84,325 with a decrease of 1.0%.
2. Greenock, Inverclyde, priced at £88,862 with an increase of 0.7%.
3. Grimsby, Lincolnshire, where homes are £93,427, down by 1.2%.
4. Blackpool, Lancashire, coming in at £93,711, showing no change.
5. Middlesbrough, Tees Valley, with properties at £95,473, up by 0.8%.
6. Hartlepool, Tees Valley, where the average is £99,525, rising by a striking 10.7%.
7. Paisley, Renfrewshire, at £99,570, a 2.3% increase.
8. East Kilbride, Glasgow, £100,814, 4.1%.
9. Ayr, Ayrshire, £101,391, 1.0%.
10. Burnley, Lancashire, £102,848, 6.2%.