First-time buyers are facing an extra £4,200 per year in mortgage payments compared to five years ago, prompting many to seek out the UK's most affordable locations.
The housing market continues to present significant challenges for those trying to get on the property ladder amid the ongoing cost of living crisis.
With mortgage costs remaining substantially higher than in 2020, buyers are increasingly looking beyond traditional hotspots.
The average price tag for a first-time buyer home currently stands at £226,887, according to Rightmove.
A typical first-time buyer in Britain now faces paying a mortgage of £940 per month, compared with just £590 per month five years ago, according to their analysis. This represents an additional £350 per month on average.
However, the property website noted that current monthly mortgage payments are still £155 lower than the peak recorded in July 2023. This slight easing offers little comfort to those struggling to enter the market.
Homeowners have been saddled with rising mortgage repayments
GETTYRightmove's calculations were based on average asking prices for first-time buyer properties and current mortgage rates. The analysis assumed buyers would have a 20 per cent deposit and spread their mortgage costs over 30 years.
For first-time buyers considering more affordable areas, Kilmarnock in East Ayrshire, Scotland, tops the list with an average asking price of just £84,325.
Cheapest Places for First-Time Buyers in the UK
According to Rightmove, here are the least expensive locations for first-time buyers, along with the average asking price for a typical starter home and the year-on-year price change:
- Kilmarnock, Ayrshire – £84,325, down one per cent
- Greenock, Inverclyde – £88,862, up 0.7 per cent
- Grimsby, Lincolnshire – £93,427, down 1.2 per cent
- Blackpool, Lancashire – £93,711, no change (zero per cent)
- Middlesbrough, Tees Valley – £95,473, up 0.8 per cent
- Hartlepool, Tees Valley – £99,525, up 10.7 per cent
- Paisley, Renfrewshire – £99,570, up 2.3 per cent
- East Kilbride, Glasgow – £100,814, up 4.1 per cent
- Ayr, Ayrshire – £101,391, up 1.0 per cent
- Burnley, Lancashire – £102,848, up 6.2 per cent
Higher mortgage rates mean home movers need to consider how much they can afford to pay each month
GETTYThere is a silver lining for first-time buyers, as Rightmove's analysis shows average wage growth has outpaced property price increases.
Average earnings have grown by 30 per cent over the last five years, compared to just a 17 per cent increase in the price of typical first-time buyer homes.
This analysis, which incorporated Office for National Statistics figures, suggests the affordability gap is narrowing slightly despite the higher mortgage rates.
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."
Property prices have long outpaced wagesONSThe Financial Conduct Authority is exploring ways to simplify mortgage rules as the housing market remains in a "delicate balance," with average property prices falling by £213 in February to £298,602, according to Halifax.
While there was speculation about a rush on new mortgages ahead of stamp duty changes, Amanda Bryden, head of mortgages at Halifax, noted that "some of the demand that was brought forward has started to fade".
Despite affordability challenges, market activity remains strong, with Bryden predicting prices will continue to rise due to the ongoing shortage of housing supply and sustained demand.
However, growth is expected to be "more measured" compared to last year.
