Older clients may be the only way on to the property ladder for younger generations, as data reveals that the estimated cost of running a first house is almost £2,000 per month.
According to analysis by Go Compare Home Insurance, mortgage repayments plus bills and maintenance costs total £1,949 per month for a first home, yet the typical first-time buyer takes home just £1,648, leaving a shortfall of around £300 every month.
The picture looks even bleaker for female first-time buyers, who earn just £1,541 per month on average meaning a home would take up 126% of their salary. The outlook is more promising for two young people looking to purchase a home together, however total running fees still equate to 58% of their combined net income each month.
While mortgages make up a large portion of the monthly costs, maintenance and repair costs could reach just under £200 each month – up to 10% of the total monthly fee.
Ceri McMillian, home insurance expert at Go Compare, said: “Many first-time buyers will be so focused on saving up for their deposit they forget to think about the subsequent costs that come with owning a property and whether this is affordable. For instance, unexpected fees for maintenance and repairs can be easily overlooked but can quickly eat into your income.
“Unfortunately, for the average solo first-time buyer, saving a 10% deposit simply won’t be enough anymore, as mortgage repayments, bills and additional fees make owning a home unaffordable. This means we could see many prospective buyers needing to save an even bigger deposit to bring down some of their costs.”
Against this backdrop, first-time buyers may be turning to older relatives for help. In 2021, the number of first-time buyer home sales with family assistance hit a seven year high of 46%, a Savills report found.
However, Paula Higgins, chief executive at the HomeOwners Alliance, said the government will also need to do more to help.
Higgins said: “The government’s flagship Help to Buy equity programme ended in March 2023 leaving a hole for aspiring homeowners. But there is still help for first-time buyers and rumour has it that the government may launch new initiatives to help first-time buyers. There are other ways the government is helping, through Lifetime ISAs, First Homes, Shared Ownership and developer-led initiatives such as Deposit Unlock.
“The government can do more though by encouraging lenders to offer longer-term fixed mortgages and to take into account regular payments of rent when they assess how much they will lend.”
