"Home-movers are starting to see some tangible affordability improvements, particularly against the peak-rate period of just over a year ago."
- Tim Bannister, Rightmove’s property expert
The average first-time buyer mortgage payment is nearly £150 lower than the mortgage rate peak in July 2023, according to new analysis from Rightmove.
The average monthly mortgage payment for a typical first-time buyer is now £949, compared with £1,096 in July 2023, a saving of £147, or 13%.
The figures are based on the typical first-time buyer market sector of two-bedroom and fewer homes and assumes a first-time buyer has been able to save up a 20% deposit and is spreading the cost of the mortgage over 30 years.
A typical first-time buyer home is now £227,191, compared with £225,552 in July 2023, while the average five-year fixed, 80% LTV mortgage rate is now 4.76%, compared with 6.12% in July 2023.
First-time buyers in the capital will see the biggest monthly cash savings compared with last year, though with higher property prices, they are likely to still be paying more than other regions on a typical mortgage.
Those in the South West will see the biggest proportional drop in monthly mortgage payments compared with last year, as it is the only region where first-time buyer property asking prices are now lower than in July 2023.
Meanwhile, average wages are up by 4% since July 2023, another sign of affordability slowly starting to improve. The UK inflation rate is also 2.2%, down from 6.8% in July 2023.
Tim Bannister, Rightmove’s property expert, said: “It’s early days, but the acceleration in mortgage rate drops since the Bank Rate cut at the start of the month means that home-movers are starting to see some tangible affordability improvements, particularly against the peak-rate period of just over a year ago. A nearly £150 saving in monthly outgoings for a first-time buyer compared with last year is significant, and though there will be many hoping that they drop further soon, we’re heading in the right direction ahead of the Autumn season.”
