First-time buyers are spending £400 a month more on mortgage payments than at the time of the last general election, according to analysis.
The typical payment has risen to £1,075 from £667 in 2019, when Boris Johnson won a landslide victory, according to Rightmove. This is a 61 percent increase in a period in which wages increased by 27 percent.
It clearly illustrates the financial squeeze facing those taking their first step on the property ladder, even as Rishi Sunak points to healthy GDP growth and falling inflation as evidence his plan is working.
And Labor is likely to take advantage of the numbers as the party seeks to trash the Conservatives’ record on the economy, particularly under Sunak’s predecessor Liz Truss. Rightmove looked at the typical cost of a five-year and 25-year fixed mortgage with a loan-to-value ratio of 80 per cent.
The average rate on these types of mortgages has more than doubled from 2.24 percent to 5.09 percent since 2019.
Financial crunch: The average home price for a first-time buyer has risen 19 per cent to £227,757
At the same time, the average price of a first-time home buyer has risen 19 per cent to £227,757. Tim Bannister, of Rightmove, said: ‘As rates have risen over the last five years, the amount a typical first-time buyer pays each month for a mortgage has outpaced the pace of income growth.
“Some first-time buyers are considering extending their mortgage terms to 30 or 35 years to reduce monthly payments, or looking at cheaper homes for sale so they will have to borrow less.”
Mortgage rates set by lenders tend to follow the expected path of the Bank of England rate. Rates have increased since 2021 as a result of high inflation, largely caused by the Ukraine war.
However, the most notable rise in mortgage rates came as a result of market turmoil following Ms Truss’ mini-Budget in autumn 2022.
Now that inflation has returned to its 2 percent target, the Bank appears close to cutting rates, but last week decided to leave them on hold for the time being.
electoral money
