House prices for first-time buyers and rents have jumped three times faster than before the pandemic, according to analysis by Rightmove.

The average rent is 17% higher, adding a typical £128 a month to bills, and they are more expensive than they were two years ago. By contrast, rents rose 5% in the previous two years.

At the same time, the average asking price for a two-bedroom or smaller home is £224,943 – a 13% rise (£17,557) from 2019. In the previous two years, values increased by 4% (£8,069).

Aspiring buyers now have to find an average £22,493 for a 10% deposit, which is £2,560 higher than two years ago when the deposit needed was £19,934.

Rightmove added that average monthly mortgage payments for new first-time buyers are 22% higher than two years ago.

Monthly mortgage payments for a new first-time buyer based on the current average rate is £976 which is £173 more than two years ago. Average monthly mortgage payments rose just £41 in the previous two years.

Those planning to buy a home said rising prices and soaring energy bills are the biggest challenge they face.

Rightmove said demand for first-time buyer homes is up by 35% compared to the market in 2019.

Navigating challenges

Tim Bannister, Rightmove’s data expert, said: “Our affordability analysis highlights the many challenges first-time buyers are trying to navigate right now. For would-be first-time buyers who are trying to save up a deposit, they are chasing a fast-moving target as average asking prices for first-time buyer homes hit another new record, and rise more quickly than they did before the pandemic.

“For those who aren’t able to live with parents or family members while saving, they also have to manage paying record rents both inside and outside of London. We understand how difficult this challenge can be, and something we’ve seen more of over the last couple of years – particularly with working from home becoming more common – is people looking further away or at a greater number of different areas when looking to move, to see what is available within their budget.”

Chris Sykes, technical director at Private Finance, added: “The problem here is the supply shortage of first homes with build numbers not reaching targets, but also there is a reluctance amongst second steppers to move further up the housing ladder; this is due to increased economic uncertainties, higher costs of living they are now facing as well, and what is often seen as extreme costs to move (estate agents costs, solicitors costs, moving costs and stamp duty soon getting into the tens of thousands).”

He continued: “Any scheme to help first-time buyers purchase their first home is only going to increase demand and push up prices further also. Despite hardships, we have still noticed a steady level of enquiries from first-time buyers.

“After seeing rapid house price growth over the last two years and rental prices rising steeply, first-time buyers may be looking to get on the housing ladder as soon as they can to start reaping the benefits of homeownership rather than paying rent.”