According to Aldermore’s latest First-Time Buyer Index, which surveyed 2,000 prospective first-time buyers and 500 actual first-time buyers, this was due to borrowers not being able to align the end of their rental contract and the purchase of their home going through.
The report found that first-time buyers double up on rent and mortgage costs for around 2.4 months.
This means that, using average rent and mortgage payment data – which estimates the national average asking rent per month at £1,314 and the average monthly mortgage payment at £790 – borrowers are spending around £5,050.
Data from the Office for National Statistics (ONS) suggests that the average annual level of earnings for full-time employees was £34,963, making the simultaneous mortgage and rent payments a significant undertaking.
Jon Cooper, director of mortgages at Aldermore, commented: “First-time buyers may want to have a slight overlap with their rental contract and newly purchased home, to remove some of the stress moving can bring. However, this comes at a cost during an already expensive time.
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“Keeping your landlord in the loop on your home buying journey is a smart way to see if you can get timings to align.
“If you’re planning to buy in the next year, you might want to consider approaching your landlord to see if they would be open to a rolling monthly contract or a more flexible break clause.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Nearly half of first-time buyers paying rent and mortgage simultaneously
