First-time buyers paying £200 more per month

Although we are seeing a rise in payments for first time buyers, we are also seeing them having a smarter approach to their finances in reaction to this. We have actually seen an increase in clients trying to save more, and focus on the money they were typically wasting each month in subscriptions and takeaways. Whilst everyone needs balance and enjoyment with their money, many first time buyers are keen to get out of the rental cycle especially with recent rent increases, and it's great to see them really taking charge of their finances to manage a higher level of saving, which puts them in good stead to manage a higher monthly mortgage payment. Whilst we want the lowest rates possible for our clients - we can't keep comparing current rates to Covid times, as this was a once in history occasion, which plummeted rates to a level never previously seen.

It's all a case of perspective. If we look at mortgage rates since 1997, when the Monetary Policy Commitee at the Bank of England was formed and given responsibility for setting the UK's base rate of interest, then mortgage rates have been more similar to what we are seeing now. So, it is more a case of the interest rate market returning to a more normal level, following a prolonged period of ultra-low interest rates. It was the last decade that was the oddity, not the current rates we are seeing. We do need to find a way of helping first-time buyers if we want future generations to have the benefits of home ownership; the political puzzle though is how to reduce prices for first-time buyers without damaging house prices for existing homeowners (who would then punish the Government of the time at the ballot box the next chance they got). Help-to-buy was a good attempt but has now vanished with no obvious successor.