Bank of England's recent rate cuts could offer them some relief
Despite reports that first-time buyers are driving the market in a rush to beat the Stamp Duty deadline, they still face significant hurdles, with high mortgage rates and a shortage of affordable homes making homeownership increasingly challenging.
According to new research from mortgage adviser Alexander Hall, the average first-time buyer property price across Great Britain is £244,519. With a 15% deposit of £36,678, buyers require an average mortgage of £207,841.
However, rising interest rates have pushed up monthly repayments. The average mortgage rate for first-time buyers now sits at 4.57%, up from 4.38% a year ago. As a result, the typical monthly repayment has increased by £79 to £1,164 – a 7.3% annual rise.
Beyond affordability, first-time buyers also face a limited housing supply. Of the 436,839 properties currently listed for sale across Britain, only 34% are priced at or below the average first-time buyer price, making competition fierce.
London remains the most expensive region for first-time buyers, with an average purchase price of £444,548. However, the West Midlands has the lowest share of properties available within the average first-time buyer budget, with just 27% of listings priced at £214,955 or lower. Other regions with limited affordable stock include Yorkshire and the Humber (31%), Scotland (31%), Wales (32%), and the South West (32%).
In contrast, the North East offers the greatest availability, with 37% of listed properties priced at or below the average first-time buyer property price of £146,393.
Amid these challenges, figures from comparison site reallymoving has revealed that first-time buyers made up a record 64% of home mover activity in December 2024 and 63% in January 2025, driven by a rush to complete purchases before higher tax bills take effect.
“Getting that first foot on the property ladder is no easy feat and today’s first-time buyers are facing a considerably tougher task than their predecessors, with the average price paid by a first-time buyer having increased by 52% over the last decade alone,” said Stephanie Daley (pictured), director of partnerships at Alexander Hall.
“Not only does this mean they require a larger deposit in order to secure a mortgage, but their monthly mortgage repayments are higher as a result, with this cost being driven up even further as a result of higher mortgage rates versus a year ago.”
Daley, however, pointed out that the Bank of England’s recent rate cuts could offer some relief.
“The good news is that we’ve already seen the Bank of England reduce interest rates already this year and, with more cuts expected to come, first-time buyers should start to benefit from easing mortgage rates,” she said.
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