First Time Buyer Woe - prices and deposits soar despite market slowdown

The average first-time buyer in Britain has seen the cost of a home increase by £25 per day since interest rates first started to climb in December 2021. 

And that’s despite a let-up in house price inflation earlier this year when prices dipped slightly according to some indices.

Property company Wayhome analysed house price data since the first Bank of England rate increase in December 2021 now some 18 months ago.

The research results claim that the high rates of house price growth seen during the pandemic have been dampened due to increasing interest rates. In fact, since December 2021, the average FTB house price has increased by 5.8 per cent.

However, this means that the high financial hurdle of getting that first foot on the ladder has increased by a further £13,018 suggesting that those who have chosen to sit tight have seen the average cost of a home increase by £25 per day. 

This also means that the average FTB deposit requirement has increased by £1,953 to £35,502, while at the same time, the average mortgage rate has risen from an estimated 1.72 to 4.22 per cent.

As a result, those looking to purchase today will be paying £306 more per month when repaying a mortgage, with the average monthly repayment now standing at £1,086 per month. 

What’s more, those stuck within the rental market have paid an average of £25 per day in rent, highlighting - according to Wayhome - how the high cost of renting prevents many from accumulating the necessary savings pot to make the jump to homeownership. 

Regionally, it’s those in the South East who have seen the largest increase in the cost of a first home since interest rates started to climb. The average FTB house price in the region has climbed by £40 per day since December 2021, with the South West also seeing an increase of £34 per day.

However, at local authority level, it’s the London Borough of Tower Hamlets that has seen the biggest increase, with the average FTB seeing the cost of a first home increase by a huge £151 per day since interest rates started to climb. This is followed by Hackney with a hefty £109 per day increase.

But these huge increases aren’t restricted to the London market alone, with Sevenoaks seeing the next largest increase at £96 per day, followed by Cambridge (£94 per day), Melton (£88 per day), Wokingham (£88 per day), Canterbury (£87 per day), Hounslow (£80 per day), and Greenwich (£80 per day)