Homeownership isn’t what it was. If you’ve tried to buy recently, you don’t need me to tell you that. One look at your bank statement will do the trick.
Those high house prices mean that nowadays, owning a home is more like compulsory saving. You pay into an account every month but are charged a hefty fee by your bank. In 2019, the typical first-time buyer spent, on average, £667 a month on their mortgage. Today, Rightmove’s analysis shows that the average monthly repayment for those who have bought their first home is £1,075. That’s an increase of £400 a month.
What we’re experiencing right now is the worst of both worlds for everyone. House prices are stagnant but they remain high. Buying a home is not affordable. Instead, for most people who manage it without large deposits gifted by family, it involves taking on an enormous amount of debt for the majority of their working lives.
“This stark contrast shows us what the impact of having your mortgage costs go up overnight because of interest rates is,” Rachelle Earwaker, senior economist at the JRF told me. “Looking ahead, we know that low-income households with expensive housing costs are disproportionately likely to be facing high levels of hardship.”