Starters who are forced to work together to climb the housing ladder

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Mortgage rates more than doubled last year, with the two-year average interest rate rising from 2.38 percent in January 2022 to 5.89 percent at the end of December. First-time buyers were particularly affected, as they tend to have larger loans with smaller deposits, which charge higher rates.

To get a mortgage, first-time buyers are increasingly relying on a second borrower to prove they can afford the repayments. Before approving a mortgage, lenders should check that borrowers can afford to pay their standard variable rate plus one percentage point. With standard variable rates rising due to higher interest rates, first-time buyers now need larger incomes or deposits to pass the affordability stress tests.

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The average first-time buyer pays more than £300,000 for their home and puts down £62,000 – or 21 per cent – for a down payment. The average cost of a first home increased by 13 percent from the previous year.

Kim Kinnaird, director of mortgages at Halifax, said: “The time it takes and the cost of collecting a down payment is likely to affect the profile of the average first-time buyer over time.” The average starter is now 32 years old, two years older than ten years ago.

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The number of new buyers fell most sharply last year in the South East, South West, Wales and Northern Ireland, with a 12 per cent drop in all of these areas. The smallest drop (7%) occurred in the East Midlands.

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