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Highlights
- The asking price of an average UK home for first-time buyers went up by £17,557 ad compared to pre-pandemic levels, according to Rightmove.
- As compared to two years ago, the monthly rental payments have gone up by 17%, or £128 on average.
- Mortgage payments have gone up by 22% as compared to two years ago.
Asking prices for UK homes have been spiraling lately. According to the recent figures released by property website Rightmove, rents and prices of houses for first-time buyers have surged three times faster as compared to the pre-pandemic levels. As per Rightmove’s analysis, the asking price of an average UK home for first-time buyers went up by £17,557, hitting a new record high level of £224,943.
Two years ago, an average 10% deposit for buying a first home stood at £19,934, but now it has gone up by £2,560, standing at £22,493. From July 2018 to July 2020, there was an increase of just £807 in the deposit needed to buy a home.
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In the same time span, first-time buyers going for properties with up to two bedrooms witnessed an increase of just 4%, or £8,069, in the average asking prices. However, since July 2020, the average asking prices have surged by 13% or £17,557.
Rents are skyrocketing for the potential buyers who are wanting to save while renting. As compared to two years ago, the monthly rental payments have gone up by 17%, or £128 on average. Meanwhile, there has been an increase of 14% in the national average earnings.
As the Bank of England has been raising the interest rates lately, the mortgage costs have been surging amid the spiralling house prices. Due to this, it has become very difficult for first-time buyers to put aside a deposit, get a mortgage, and buy a house while facing 22% higher mortgage costs as compared to two years ago. For first-time home buyers, the mortgage payments are going to get costlier by £173, standing at £976 currently.
Amid the rising mortgage costs, UK investors can keep an eye on the following stocks.
OSB Group plc (LON: OSB)
Leading UK mortgage lending firm OSB Group plc had a market cap of £2,235.97 million as of 25 July. OSB is currently offering its investors an annual dividend yield of 5.3%. The bank has a positive EPS of 0.42. On Monday, OSB’s yearly return was in the positive zone at 8.79%, but its YTD return has dipped to -8.30%. OSB Group plc’s shares, however, witnessed a rally by 0.30% at around 12:00 PM (GMT+1) on Monday, at GBX 508.50.
HSBC Holdings plc (LON: HSBA)
HSBC Holdings plc is a prominent UK bank providing assistance to its clients for property financing and mortgage refinancing. The firm falls under the FTSE 100 index and has a market cap of £2103,104.49m as of 25 July. HSBA is currently offering its investors an annual dividend yield of 4.1%. As of 25 July, both of HSBA’s yearly and YTD returns lie in the positive zone at 30.63% and 16.93%, respectively. HSBC Group plc’s shares were rallying by 1.81% at around 12:00 PM (GMT+1) on Monday, at GBX 524.50.
Source: https://uk.finance.yahoo.com/news/first-time-buyer-house-prices-rents-mortgage-costs-230106263.html
