First-time home buyers paying £200 more per month - Rightmove

First-time home buyers are paying nearly £200 more per month on their mortgages, industry research showed on Friday, after rates soared.

According to property portal Rightmove, first-time buyers with a 15% deposit are currently paying £1,056 per month, compared to £865 a year earlier. It is, however, lower than the average £1,218 per month paid in October.

Mortgage rates spiked in the autumn in response to the government’s disastrous mini-budget. They have since stabilised, but an extremely competitive rental market and the ongoing popularity of home ownership means demand remains strong.

Rightmove said that demand for a first home was up 11% on pre-pandemic levels.

The average rate for a five-year fixed, 15% deposit mortgage is now 4.44%, down from 5.98% in October but well above 2.76% in May 2022. The average asking price for a first-time buyer type property, meanwhile, is a record £224,963.

Matt Smith, a mortgage specialist at Rightmove, 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."

Rightmove’s analysis was based on the average asking price of a typical first-time buyer type property, which it defines as two bedrooms or fewer, with the average rate for a five-year fixed 85% loan-to-value mortgage spread over 25 years.