New first-time buyers pay £200 more than last year
- First-time buyers with a 15% deposit now pay £1,056 per month compared with £865 last year, due to higher mortgage rates and a new record asking price:
- However, this is significantly lower than the average of £1,218 per month in October
- The average rate for a five-year fixed, 85% Loan-To-Value (LTV) mortgage is now 4.44%, down from 5.89% in October, though up from 2.76% last year
- Stabilising mortgage rates, a frenetic rental market and a determination to get onto the ladder has meant that demand for a first home is 11% higher than pre-pandemic levels
- Average monthly mortgage payments for all home-movers are steadying as mortgage rates settle:
- Someone purchasing an average property with a 15% deposit would now pay £1,720 a month, compared to £2,012 per month in October and £1,799 per month in January
New data from the UK’s biggest property website Rightmove reveals that new first-time buyers are now paying nearly £200 more per month on their mortgage than last year due to a new record average asking price and higher mortgage rates.
First-time buyers with a 15% deposit are now paying £1,056 per month compared with £865 last year.
However, to put this into context this is significantly lower than the £1,218 per month that a new first-time buyer would have paid on average at the peak of rates in October, a comparable saving nearly £200 per month.
The analysis is based on the average asking price for a typical first-time buyer type property (2 bedrooms and fewer properties) and the average rate for a five-year fixed, 85% Loan-To-Value (LTV) mortgage spread over 25 years.
The average rate for a five-year fixed, 15% deposit mortgage is now 4.44%, down from an average of 5.89% in October, but up from 2.76% this time last year.
Meanwhile, the average asking price for a first-time buyer type property is now a new record of £224,963.
However, the signs are that determined first-time buyers are still doing all they can to get onto the ladder despite economic challenges. Buyer demand in the first-time buyer sector is currently 11% higher than the last more normal market of 2019 and is holding up most strongly against pre-pandemic levels.
Average mortgage rates becoming more stable, and a frenetic rental market are key drivers for this determination from first-time buyers. The average asking rent for a first-time buyer type property is now £1,120 per calendar month and has increased 11% compared with last year.
The average amount someone taking out a mortgage would expect to repay each month is now beginning to steady as mortgage rates settle.
Someone purchasing a property at the current average asking price of £366,247 with a 5-year fixed, 15% deposit mortgage would now pay £1,720 a month.
This compares to £2,012 per month at the peak in October after the mini-budget, and £1,792 per month in January.
Rightmove’s mortgage expert Matt Smith said: “The combination of a new record price and higher mortgage rates than last year means it is a challenge for first-time buyers. Our data indicates that first-time buyers who are able to raise their deposit are still finding buying compelling, with the number of people looking to move in this sector currently higher than the last more normal market of 2019. It was understandable that some buyers took a step back in the immediate aftermath of the mini-budget, particularly first-time buyers, as mortgage rates rapidly rose. Those looking to buy now may find that the average monthly mortgage payment on the home they are looking to buy is significantly less than they may have paid at the peak of rates in October. Now that rates are settling, would-be buyers planning a move may need to assess their individual circumstances and weigh up their affordability based on current rates, with the potential cost of waiting or paying rent for longer.”
Average monthly mortgage payments by type of buyer*
| Type of buyer | Average asking price | Average monthly mortgage payment | Average monthly mortgage payment October 2022 | Change in average monthly mortgage payment vs October | Average monthly mortgage payment a year ago | Change in average monthly mortgage payment vs a year ago |
| First-time buyer | £224,963 | £1,056 | £1,218 | -£161 | £865 | +£191 |
| Second-stepper | £339,359 | £1,594 | £1,843 | -£249 | £1,307 | +£286 |
|
Top-of-the-ladder |
£666,566 |
£3,130 |
£3,709 |
-£579 |
£2,574 |
+£556 |
*Based on a five-year fixed, 85% Loan-To-Value, 25 year term mortgage
Rightmove weekly mortgage tracker – 3rd May 2023
| LTV
(loan to value) |
Term
|
Average rate
25th April 2023 |
Average rate
3rd May 2023 |
Weekly Change | Average rate
a year ago |
|
85%
|
5 year fixed | 4.45% | 4.44% | -0.01% | 2.76% |
|
60%
|
5 year fixed | 4.12% | 4.17% | +0.05% | 2.49% |
| LTV (loan to value) |
Term
|
Average rate
25th April 2023 |
Average rate
3rd May 2023 |
Weekly Change | Average rate
a year ago |
|
95%
|
2 year fixed | 5.48% | 5.45% | -0.03% | 3.20% |
|
95%
|
5 year fixed | 5.10% | 5.10% | 0.00% | 3.46% |
|
90%
|
2 year fixed | 5.04% | 5.04% | 0.00% | 2.74% |
|
90%
|
5 year fixed | 4.67% | 4.69% | +0.02% | 2.91% |
|
LTV (loan to value) |
Term |
Average rate
25th April 2023 |
Average rate
3rd May 2023 |
Weekly Change | Average rate
a year ago |
|
85%
|
2 year fixed |
4.81% |
4.79% |
-0.02% |
2.63% |
|
85%
|
5 year fixed
|
4.45% |
4.44% |
-0.01% |
2.76% |
|
75%
|
2 year fixed |
4.54% |
4.58% |
+0.04% |
2.49% |
|
75%
|
5 year fixed
|
4.23% |
4.26% |
+0.03% |
2.55% |
|
60%
|
2 year fixed
|
4.45% |
4.51% |
+0.06% |
2.48% |
|
60%
|
5 year fixed |
4.12% |
4.17% |
+0.05% |
2.49% |
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