Despite a cooling housing market that has seen the average UK house price fall every month since November 2022, the average first-time buyer (FTB) has seen the cost of a home increase since interest rates first started to climb in December 2021., according to a study from Gradual Homeownership provider, Wayhome.
Since December 2021, the average FTB house price has risen by 5.8%, increasing the financial hurdle of buying a first home by £13,018. This increase translates to an average daily cost increase of £25 for those waiting to buy their first property.
Additionally, the average FTB deposit requirement has climbed by £1,953 to a total of £35,502. During the same period, the average mortgage rate has risen from an estimated 1.72% to 4.22%. Consequently, those entering the property market now will be paying an extra £306 per month on average for their mortgage repayments, with the average monthly repayment now standing at £1,086.
The study also highlights the plight of renters, who have paid an average of £25 per day in rent, an amount which impedes their ability to save for a down payment.
In terms of geographical impact, the South East region has seen the highest increase in the cost of a first home, with the average FTB house price in the region rising by £40 per day since December 2021. The South West has seen a daily increase of £34.
At a local authority level, the London Borough of Tower Hamlets has seen the largest increase, with FTB house prices surging by an astonishing £151 per day. Hackney follows with a substantial £109 per day increase. Outside of London, Sevenoaks has seen the next largest increase at £96 per day, followed by Cambridge (£94), Melton (£88), Wokingham (£88), Canterbury (£87), Hounslow (£80), and Greenwich (£80).
Wayhome’s CEO, Nigel Purves said: “First-time buyers have never had it so hard, with the average price of a home increasing by £25 per day… For many people, this just isn’t feasible and they find themselves locked out of homeownership and stuck in rentals where prices are also rising.”
