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‘Hell to Buy’: First-time buyers face £4k hit this year

Written by: John Fitzsimons
A first-time buyer purchasing a home today will be £4,000 worse off than if they had bought that property a year ago.

That’s according to analysis from the Liberal Democrats. The price hit is down to the “double whammy” of the removal of the Help to Buy scheme and rising interest rates. 

The party’s research pointed to the impact of losing out on the potential of gaining an interest-free equity loan worth 20% of the property’s value in order to supplement their deposit, as well as the fact that monthly mortgage repayments today could be double what they would have paid a year ago as a result of mortgage rates for such buyers passing 5%.

For example, the research suggested that typical monthly mortgage bills for a first-time buyer in England today are around £1,389, which is £354 a month higher than at the same point last year. Over a year that equates to a hit of £4,252.

The situation is more pronounced in the capital, due to the higher loans on offer through the Help to Buy scheme. The Lib Dems’ calculations found that a first-time buyer in London now faced spending an extra £755 a month, or £9,058 a year, compared with if they had bought in 2022.

‘Never been a worse time to be a first-time buyer’

The party have called for the Government to introduce a fund to support young families who are unable to afford the increase in mortgage payments, and face the threat of repossession. It would mean those who have seen their payments increase by more than 10% of their income could ask for a grant of up to £300 a month.

Helen Morgan, housing spokesperson for the Liberal Democrats, suggested there has “never been a worse time to be a first-time buyer”.

She argued that the Government had “pulled the rug from underneath young families” who had saved to get onto the housing ladder, but are now paying the price of higher mortgage rates.

“It is time Ministers stepped in and saved Brits at risk of losing their first home. We could have young families losing their home with these eye-watering rate hikes. An Emergency Mortgage Protection Fund could ensure no hardworking family loses their home because of this economic meltdown,” she concluded.

There have been reports that the Government is considering some form of relaunch for Help to Buy.

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