London first time buyers will need an extra £34,500 of income on average due to rising interest rates

London first time buyers will need an extra £34,500 of income on average due to rising interest rates

· Sterling crisis could drive up interest rates

· First time buyers are the largest buyer group in the country but they’re about to be hit with higher interest rates. Here’s what’s happening and how you can offset the rising rates.

Key takeaways

· First time buyers, the largest buyer group in the UK with nearly 177,000 transactions so far in 2022, will need an average of £12,250 more on their income to get a mortgage based on 4% interest rates

· A whopping £34,500 extra is needed in the London market, but less than £5,000 in more affordable regions

· Property interest among FTBs is up by 46% year on year as they drive the market from the bottom up.

· More than half of their enquiries for three bedroom homes and an average price 10% higher than this time last year (£269,000).

· FTBs are looking further afield in cheaper areas to buy a home, meaning less time spent saving up for a deposit.

· Zoopla data shows that 25% of first time buyers outside of London are now searching 10km or more from their home address. Source: Zoopla

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Sterling crisis could drive up interest rates

Interest rates and inflation could soar if the Pound continues to fall against the Dollar.

Goldman Sachs predict that inflation could reach 20%!

Energy will rise again next month, food prices are rising at more than 10% and unions are striking for higher pay deals and some want to minimum wage to go up to £15 per hour.

Germany now has the highest inflation rate for 40 years.

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