First-time buyers are facing an uphill battle as mortgage costs continue to rise and affordable housing remains in short supply, latest research from mortgage adviser Alexander Hall reveals.
The average mortgage rate for first-time buyers has climbed to 4.57%, up from 4.38% a year ago, pushing monthly repayments to an average of £1,164 – an annual increase of 7.3%, or £79 per month. With house prices also remaining stubbornly high, the financial burden on those attempting to get onto the property ladder is heavier than ever.
Alexander Hall’s data reveals that the average first-time buyer property in Great Britain now costs £244,519, requiring a 15% deposit of £36,678 and an average loan of £207,841. But securing a mortgage is only half the battle, as competition for affordable properties is fierce.
Out of 436,839 homes currently on the market, just 34% fall within the average first-time buyer price bracket. In some regions, the outlook is even bleaker. The West Midlands offers the lowest availability of affordable homes, with only 27% of listings priced at or below the average first-time buyer price of £214,955. Yorkshire and the Humber (31%), Scotland (31%), Wales (32%), and the South West (32%) also rank among the most challenging regions for first-time buyers.
MOST EXPENSIVE
London remains the most expensive region, with the average first-time buyer paying £444,548. However, the North East stands out as the most accessible market, where 37% of listings are priced at or below the region’s average first-time buyer property cost of £146,393.
With mortgage costs rising and affordable stock dwindling, first-time buyers face an increasingly difficult journey. As affordability constraints tighten, estate agents and mortgage brokers alike will need to adapt to a market where demand continues to outstrip supply.
TOUGH TASK
Stephanie Daley, Director of Partnerships at Alexander Hall, says: “Getting that first foot on the property ladder is no easy feat and today’s first-time buyers are facing a considerably tougher task than their predecessors, with the average price paid by a first-time buyer having increased by 52% over the last decade alone.
“Not only does this mean they require a larger deposit in order to secure a mortgage, but their monthly mortgage repayments are higher as a result, with this cost being driven up even further as a result of higher mortgage rates versus a year ago.”
AFFORDABILITY ISSUES
She adds: “Of course, the initial challenge is finding a property within the boundaries of affordability and, as our research shows, only around a third of homes currently on the market are realistically affordable for the average first-time buyer.
“The good news is that we’ve already seen the Bank of England reduce interest rates already this year and, with more cuts expected to come, first-time buyers should start to benefit from easing mortgage rates.”
