Falling mortgage rates mean the monthly repayment for a typical first-time buyer is now £949, compared with £1,096 in July last year.

The figures are based on typical first-time buyer properties, which have two bedrooms or fewer, and assume a 20% deposit and 30-year mortgage term.

A typical first-time buyer home is now £227,191, compared with £225,552 in July 2023, while the average five-year fixed at 80% LTV is now 4.76%, compared with 6.12%.

First-time buyers in the capital will see the biggest drop in mortgage costs compared with last year, but as prices are higher in London they are still likely to be paying more than other regions.

First-time buyers in the South West will see the biggest proportional drop in mortgage payments compared with last year, as it is the only region where asking prices are now lower than in July 2023.

Meanwhile, average UK wages are up by 4% over the same period, giving a further boost to affordability. 

The consumer prices index inflation rate has come down from 6.8% in July 2023 to 2.2% this July.

Rightmove property expert Tim Bannister says: “It’s early days, but the acceleration in mortgage rate drops since the Bank Rate cut at the start of the month means that home-movers are starting to see some tangible affordability improvements, particularly against the peak-rate period of just over a year ago.

“A nearly £150 saving in monthly outgoings for a first-time buyer compared with last year is significant, and though there will be many hoping that they drop further soon, we’re heading in the right direction ahead of the Autumn season.”