Mortgage affordability for first-time buyers improves, says Lloyds

First-time buyer mortgage affordability has improved over the past year, according to Lloyds.

The lender’s affordability review today shows a typical first-time buyer home now costs 5.9 times average earnings, which it says is the lowest ratio since 2015.

The analysis is based on a typical first property costing £237,518, up 2.4% over the last year, while average incomes are up by 6.2% to £40,021. The report uses mortgage approval data from Lloyds and Halifax’s customers compared to ONS figures for earnings.

Typical monthly mortgage costs have risen by just for first-time buyers over the last year to £1,087. This is a result of lower interest rates offsetting the modest increase in property prices.

Lloyds said the increase in affordability was driven by “a combination of lower interest rates, rising wages and slower house price growth”.

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Typical monthly mortgage costs have risen by just 0.1% for first-time buyers over the last year to £1,087. This is a result of lower interest rates offsetting the modest increase in property prices, said Lloyds.

Amanda Bryden, head of mortgages at Lloyds, said: “Buying your first home is still a big challenge, but things are moving in the right direction. Lower mortgage rates, stronger wages and slower house price growth mean it’s becoming a little easier to get on the ladder – the best it’s been for several years. “