First-time buyer asking prices and equivalent asking rents have risen three times faster over the last two years, compared to the same period before the pandemic, according to Rightmove.

New data from the property website says average asking prices “for FTB type properties” – two bedrooms or fewer – are up 13%, or £17,557, since July 2020, compared with the 4%, or £8,069, rise between July 2018 and July 2020. 

It adds: “For prospective FTBs looking to save while renting, they face the challenge of record rents that are rising at the fastest rate ever recorded. Average monthly rental payments are 17% higher, or £128, nationally than they were two years ago. National average earnings have risen by 14% over the same period.”

The report comes as the Office for National Statistics said last week that inflation hit 9.4% in June, setting a fresh 40-year record high, driven by rising fuel and food prices. The Bank of England has raised interest rates five times since December to 1.25%. 

The Right move study says “FTB type properties” have hit a UK record of £224,943, with an average 10% deposit now standing at £22,493.

It adds: “This is £2,560 higher than two years ago when the deposit needed was £19,934. Between July 2018 and July 2020, the deposit needed for an average first home only rose by £807.

“For new FTBs who have been able to save a deposit, get a mortgage and secure a property, they now face average monthly mortgage payments that are 22% higher than two years ago, due to house price increases and interest rate rises.” 

Monthly mortgage payments for a new FTB based on the current average rate is £976, which is £173 more than two years ago, says the report. Average monthly mortgage payments rose just £41 in the previous two years. 

 In an earlier May report, the property website surveyed the attitudes of those planning to buy their first home, who said that rising house prices and soaring energy bills are the biggest challenges they faced. It found that 43% of these potential buyers hope to be able to have enough saved to buy within the next three years, with two-thirds already starting to save each month for their deposit. 

Rightmove data expert Tim Bannister says: “Our affordability analysis highlights the many challenges FTBs are trying to navigate right now. For would-be FTBs who are trying to save up a deposit, they are chasing a fast-moving target as average asking prices for FTB homes hit another new record, and rise more quickly than they did before the pandemic.

“For those that aren’t able to live with parents or family members while saving, they also have to manage paying record rents both inside and outside of London.

“Those that have been able to save up a deposit are now facing rising interest rates when considering what they can afford to repay each month. Given the economic uncertainty at the moment, FTBs may seek some financial certainty by locking in a longer fixed-rate mortgage term now, before interest rates rise again.”