Homeownership has become increasingly unaffordable for the average first-time buyer in the UK, according to new analysis by Go.Compare Home Insurance.
The study reveals that the monthly cost of owning a home, including mortgage repayments, bills, and maintenance fees, would amount to just under £2,000, significantly outpacing the average income of first-time buyers.
The insurance comparison site has estimated that total running fees for a home would be approximately £1,949 per month. Meanwhile, the typical first-time buyer takes home just £1,648 each month, leaving them with a deficit of around £300 to make up.
For female first-time buyers who are purchasing a home alone, the situation is particularly dire, as the monthly costs of homeownership would constitute 126% of their average salary. Single male first-time buyers also struggle, with the costs amounting to 109% of their monthly income.
Even when pooling resources as a couple, first-time buyers face steep costs. The total monthly fees would equate to 58% of a couple’s combined net income, with mortgage repayments being the primary expense. For individual homeowners, the average mortgage payment alone would consume a staggering 78% of their net income each month.
Maintenance and repair costs add another layer of financial strain. Go.Compare estimates these costs to be nearly £200 each month, making up 10% of the total monthly expenses for owning a home.
Ceri McMillian, home insurance expert at Go.Compare, said: “Many first-time buyers are so focused on saving up for their deposit that they forget to consider subsequent costs like maintenance and repairs. Unfortunately, for the average solo first-time buyer, a 10% deposit simply won’t suffice anymore. Prospective buyers may need to save even larger deposits to bring down some of their costs.”
Additionally, the study indicated that it would take a minimum of three years for the average first-time buyer to save up enough to buy a home. This includes the cost of a 10% deposit along with other associated expenses like legal fees and moving costs, amounting to a total of £26,305.
Paula Higgins, chief executive at the HomeOwners Alliance, highlighted that although the government’s Help to Buy equity programme ended in March 2023, there are still initiatives such as Lifetime ISAs and Shared Ownership aimed at assisting first-time buyers. “The Government can do more, however, by encouraging lenders to offer longer-term fixed mortgages and to consider regular rent payments in lending assessments,” Higgins added.
