First-time patrons get £150-a-month bonus thanks to alter

New first-time homeowners are reportedly saving around £150 per month on mortgage payments compared to July last year. The drop in interest rates means that a new homeowner is typically shelling out £949 a month, down from £1,096.

Thanks to lower mortgage rates, buying property has become more affordable, leading to a 20% increase in footfall at estate agencies. These stats come courtesy of property website Rightmove, which highlighted that the average five-year fixed, 80% Loan-to-Value mortgage rate now stands at 4.76%, a decrease from 6.12% in July 2023.

Concurrently, some banks and building societies are enhancing their loan offerings for first-time buyers, with some even offering up to 5.5 times income. Rightmove’s data is based on the typical first-time buyer market sector, covering properties with up to two bedrooms.

It assumes that the buyer has managed to save a 20% deposit and is spreading the cost of the mortgage over 30 years. The average first-time buyer is now spending £227,191, a slight increase from £225,552 in July 2023.

According to Rightmove, first-time buyers in London will see the most significant monthly savings compared to last year, with an average of £313 a month. This reflects the fact that the typical first-time buyer purchase price in the capital is a staggering £509,085.

Those residing in the South West are set to see the largest proportional decrease in monthly mortgage payments compared to last year, as it’s the only region where first-time buyer property asking prices at £252,158 are now lower than in July 2023.

Regional first-time buyer trends

Region Average asking price Average monthly mortgage payment Monthly saving

East Midlands £192,838 £805.68 -£122

East of England £273,670 £1,143.39 -£189

London £509,085 £2,126.96 -£313

North East £133,581 £558.10 -£79

North West £176,972 £739.39 -£84

Scotland £140,051 £585.14 -£93

South East £294,605 £1,230.86 -£203

South West £252,158 £1,053.52 -£196

UK £227,191 £949.20 -£147

Wales £185,482 £774.94 -£95

West Midlands £194,448 £812.41 -£111

Yorkshire/The Humber £176,065 £735.60 -£102

Tim Bannister, a property expert at Rightmove, commented: “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.”