In Britain, most first-time buyers now pay more for their mortgage than they did for rent

For most people buying a home for the first time in Britain, leaving a rented home for a home of their own no longer means lower monthly costs — it means higher ones. New research by the estate agent Hamptons has found that last month 56% of first-time buyers said their monthly mortgage payments were higher than the rent they used to pay, the highest proportion in at least a decade.

According to the research, those buyers paid £39 more on average than their previous rent. In the era of low interest rates the calculation ran the other way — paying a mortgage instead of rent saved money each month, which was why many people moved to buy as quickly as they could. That saving argument has now disappeared for many.

Hamptons says mortgage rates have been climbing in the UK since the outbreak of war in the Middle East. Volatility in the bond markets has driven up the swap rates that affect the pricing of fixed-rate deals, so market turmoil has landed directly on ordinary buyers' monthly payments.

Earlier this month the average cost of a five-year fixed-rate mortgage hit the 6% barrier for the first time in three years. On Monday morning the average rate stood at 5.99%, while the average rate for a two-year fixed mortgage was 5.96%, according to the financial analyst Moneyfacts.

Aneisha Beveridge, the head of research at Hamptons, said that when interest rates were low, the financial case for tenants to buy as soon as they could was fairly straightforward. Higher mortgage rates have turned that equation on its head, she said. The long-term benefits of home ownership — building equity, greater security and eventually owning a home outright — remain, but the immediate monthly saving that once rewarded tenants for making the leap has largely disappeared.

The pressure also varies sharply by age. First-time buyers in their 40s faced the biggest jump in their housing costs, with 67% taking on a mortgage that was more expensive than their rent. On average, their monthly mortgage costs were 18% higher than their rent.

Rents, meanwhile, are not standing still either. Newly agreed rents across Great Britain rose by 2.7% on an annual basis in September, the fastest pace in almost two years. The average rent now stands at £1,433 a month nationally, up from £1,396 in September last year.

The pressure is greater still in London. In Greater London the average monthly rent on new lets stood at £2,357, up 1.5% compared with last year. It increased the most in the south of England, where the average rose by 3.7% to £1,419, Hamptons found.

Beveridge said that so far this year, higher rents have mainly been felt by tenants moving home. But if growth continues to pick up, it is likely to feed through to more existing tenants in the coming months as the gap between new and existing rents widens.

Taken together, housing in Britain is now expensive from both directions — rents are rising for those who stay, and mortgage payments exceed rent for many who buy. The long-term benefits of ownership remain, but the pressure on the monthly budget has become the most immediate reality for first-time buyers.