That’s according to Rightmove, which has revealed the financial challenges facing many first-time buyers.
The property portal assumed a 20% deposit and a 30-year mortgage term in its analysis. It said that, despite the overall five-year rise in costs, payments have actually dropped from the 2023 peak of £1,095.
Rightmove added that there has been a 30% rise in average wages over the past five years, compared to a 17% increase in first-time buyer property prices.
Despite this, affordability is stretched and borrowing remains a challenge because lenders cap most of their mortgages at 4.5 times the borrower’s income, due to strict rules.
The Financial Conduct Authority is currently looking at changes to its lending rules that could potentially give lenders more flexibility on how much they can offer.
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Regional differences
The challenges are stark in London, where the average price for a first-time buyer property is £500,066, 6.8 times the combined average national wage.
The North East is much more affordable, with average properties priced at £132,854 or 1.8 times a joint income.
For single buyers, the situation is most challenging. In over half of UK regions, a typical first home exceeds the affordability threshold for a single income, even with a 10% deposit.
Cheapest places for first-time buyers
For those willing to relocate, Scotland offers the lowest prices. Kilmarnock, Ayrshire, has the UK’s lowest average asking price for first-time buyer properties at £84,325. Greenock, Inverclyde, is second cheapest at £88,862, and in England, Grimsby is cheapest with first-time buyer homes at £93,427.
Matt Smith, Rightmove’s mortgage expert, 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.”
