In Britain, 56% of first-time buyers pay more for a mortgage than for rent — The Guardian

In the United Kingdom, 56% of first-time buyers last month reported that their monthly mortgage payments exceeded the amount they had previously paid in rent. This is the highest share in at least a decade, while the average difference was £39, The Guardian reports, citing data from estate agency Hamptons.

Rising mortgage rates

Mortgage rates in the United Kingdom have been rising since the start of the war in the Middle East. Volatility in the bond market has pushed up swap rates, which affect the cost of fixed-rate loans.

At the beginning of October, the average rate for a five-year fixed-rate mortgage reached 6% for the first time in three years. As of the morning of October 19, it stood at 5.99%, while the average rate for a two-year fixed-rate loan was 5.96%, according to Moneyfacts.

More current news is available on the UA.News Telegram channel Telegram.

Costs for buyers aged 40 to 49

Hamptons recorded the most noticeable increase in housing costs among first-time buyers aged 40 to 49: for 67% of them, a mortgage proved more expensive than their previous rent. On average, their monthly mortgage costs were 18% higher.

Hamptons head of research Aneisha Beveridge noted that when interest rates were low, the financial case for moving quickly from renting to buying a home was more evident. According to her, higher rates have changed this situation, although the long-term benefits of homeownership remain building equity, greater stability and the opportunity to eventually own a home outright.

Rent is also becoming more expensive

At the same time, new rental agreements in the United Kingdom rose by 2.7% year on year in September, the fastest pace in almost two years. The average rent reached £1,433 per month, compared with £1,396 a year earlier. In Greater London, the average cost of a new rental was £2,357, 1.5% higher than a year earlier.