Rents are now cheaper than mortgages so should first-time buyers hold off?
Daily Mail Aspiring first-time buyers have found themselves caught between a rock and a hard place due to escalating rents and mortgage rates.
Not only have higher home loan rates made it more difficult to buy a first home, rising rents also reduce the amount that can be saved for a deposit.
The average five-year fixed mortgage rate is now 5.67 per cent, according to Rightmove, up from 2.22 per cent two years ago.
This means that the average person buying with a 200,000 mortgage (with a five-year fix and a 25-year term), will have home loan payments of 1,249 a month compared to 869 if buying two years ago.
But renters face similar financial strain. The average rent has gone from 1,029 to 1,261 a month per propertyover the past two years, according to HomeLet's Rental Index.
Rental affordability is now at its worst point for over a decade, according to estate agent Zoopla.
Zoopla said average UK rents now account for 28.3 per cent of average pre-tax earnings, versus a 10-year average of 27 per cent.
