First-time buyer house prices and rents have risen three times faster in the two years since the pandemic than before Covid hit as a property boom pushes property ownership further out of reach.
Monthly rental payments are rising at the fastest rate ever recorded, according to Rightmove – increasing by 17pc since 2020, compared to 5pc in the two years before that. Wages rose by 14pc in the same period, meaning income has failed to keep up.
The average 10pc deposit now stands at £22,493, 13pc higher than two years ago, Rightmove found. Average monthly mortgage payments have climbed 22pc.
A new first-time buyer now typically pays £973 a month based on the average mortgage rate, up £173. In the previous two years the increase was just £41.
Tim Bannister, of Rightmove, said that chasing soaring house prices had put first-time buyers at a disadvantage if they were unable to live with parents or family members while saving.
The average monthly rental payment is up to £128 over the last two years, with a tax crackdown on landlords driving many out of the market and reducing supply.
A survey conducted by Rightmove found those planning to buy their first home said the biggest challenges they face are rising house prices and soaring energy bills.
Fewer than half (43pc) said they hoped to be able to afford a home within the next three years. Two thirds of respondents had already started saving towards a deposit, the survey found.
However, Rightmove said demand for first-time buyer properties is up by 35pc compared to 2019, suggesting many are still determined to get on the ladder despite stretched affordability.
Mr Bannister said: “We understand how difficult this challenge can be, and something we’ve seen more of over the last couple of years, particularly with working from home becoming more common, is people looking further away or at a greater number of different areas when looking to move, to see what is available within their budget.
“Those that have been able to save up a deposit are now facing rising interest rates when considering what they can afford to repay each month.
“Given the economic uncertainty at the moment, first-time buyers may seek some financial certainty by locking in a longer fixed-rate mortgage term now, before interest rates rise again.”