First-time buyers are spending more than two-thirds of their take-home pay on mortgage repayments, according to data from Nationwide.
In the last three months of 2022 the typical mortgage repayment rose to consume 39% of a first-time buyer’s net pay, up from 30% a year earlier. But in London buyers are paying an average of 67% of their take-home pay, compared with 51% a year ago.
The hike is partly due to the increase in mortgage interest payments, which doubled to 6% following Kwasi Kwarteng’s mini-Budget in September.
The most unaffordable homes are in London, where they are on average 9.2 times salary, rising to 15.6 times in Westminster. The cheapest are in Scotland where they average 3.4 times salary, with Inverclyde in Renfrewshire averaging just 2.6 times salary.
Raising a deposit continues to be the main barrier to buying a first home. It takes just over 15.3 years to save a 20% deposit in London, compared with just 5.8 years in Scotland.
