First-time buyers are now paying thousands of pounds less than the market average for their first house, a property website says. Those who have got a foot on the property ladder recently are buying homes at at an average cost of £244,100, which is around £20,000 lower than the usual price in their area, according to Zoopla.
Due to higher mortgage rates, Zoopla has calculated that the average first-time buyer who bought a home in the final quarter of 2023 is spending an extra £213 a month on their mortgage, compared to someone who bought their first house in the fourth quarter of 2022.
If you became a homeowner in 2023, the property site says your average monthly mortgage payment would be around £990. For those who had bought a house a year earlier, the average monthly mortgage was around £777.
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To work this out, Zoopla used data from UK Finance which includes the average deposit sizes.
Zoopla’s Senior Property Researcher, Izabella Lubowiecka, said: “First-time buyers are in a stronger position in the current buyer’s market so we encourage them to be resourceful and assess all the options available to them.”
It comes as house prices have been on the rise across the country in recent months, with the average UK home now costing £291,030, according to Halifax’ latest house price index.
James Briggs, from mortgage lender Together, says that rising house prices in general could mean good news for first-time buyers. He said: “A rise in house prices indicates a heartening shift in market confidence. While we are still early in the year, mortgage rates are beginning to fall as lenders anticipate a calming of inflation and possible falls in the Bank of England base rate in the next few months. This relative stability could create clear opportunities for buyers to get a foot on the ladder for the first time.
“Indeed, our research highlights 69 percent* of millennials are particularly ambitious in their aspirations to buy first homes in the next five to 10 years. And, as activity picks up in the lead up to springtime, we anticipate more of this demographic turning this dream into a reality – so long as this group has access to adequate financial support to help open those doors.”