Spending on rent by first-time homeowners prior to purchasing a home has seen a significant increase, amounting to £46,621 over the past ten years.
In the current economic climate, the cost of living in the United Kingdom continues to be a significant concern for many, particularly first-time buyers seeking to purchase a home.
According to recent data, Wales experienced the highest increase in rent payments, with an 7.8% hike to an average of £811 per month. England, on the other hand, holds the highest average rent of £1,403. Conversely, the lowest average rent can be found in the North East, at £745.
These rising rent costs are causing concern for tenant campaign groups like Generation Rent, who are calling on the Government to take action and limit rent increases in certain areas. The growing burden of rent payments is stifling many first-time buyers' ability to save enough for a deposit.
First-time buyers are now spending an average of £163,047 on rent before purchasing a home, a 40% increase compared to a decade ago. This substantial rise in rental costs is making it increasingly difficult for young people to afford the deposit needed to purchase a home. On average, a 10% deposit on the current average property price of £270,000 amounts to £27,000.
The average house price in July, as per Office for National Statistics data, climbed to £270,000. In light of these rising prices, some lenders are loosening mortgage affordability rules in response to regulatory changes announced by Chancellor Rachel Reeves. However, mortgages with low deposits often come with higher interest rates.
In an effort to enhance consumer protection and ensure stricter affordability checks, the key regulatory changes introduced by Finance Minister Rachel Reeves aim to tighten the rules for lenders offering low-deposit loans.
Despite these challenges, there are several mortgage lenders offering loans with deposits less than 5%. For instance, Newcastle Building Society offers a 2% deposit deal for mortgages. No fees are charged on 30 funds, providing an opportunity for potential homeowners.
However, restrictions may apply for those who can apply for low-deposit mortgages. The average length of time first-time buyers rent before purchasing a home has increased to 12.8 years, compared to 11.4 years a decade ago.
The rising costs of rent and living are undeniably impacting the housing market and the ability of first-time buyers to secure a place of their own. The need for affordable housing solutions remains a pressing issue, with experts like Bell suggesting more low-deposit solutions are needed to help young people buy houses.
Read also:
- Catastrophe at a U.S. Steel facility in Pennsylvania results in the loss of two lives. crucial details unveiled
- Manipulating Sympathy: Exploiting Victimhood for Personal Gain
- Prices remain a concern for the Germans
- Auto Industry Updates: Geotab, C2A, Deloitte, NOVOSENSE, Soracom, and Panasonic in Focus
