First-time buyers struggle with rising costs ahead of UK Budget

Pre Ramteke, a first-time homebuyer from India, says saving for a deposit is out of reach as house prices and mortgage costs soar. After moving to the UK in 2021, she and her partner have found buying a home difficult due to rising property prices and the cost of living. This concern comes ahead of this week's Budget, when the government is expected to release details of its proposed "Your First Home" scheme aimed at helping more first-time buyers.

Rising costs and mortgage rates

The average interest rate on a new five-year fixed mortgage deal has hit 6% for the first time in three years, with house prices continuing to climb. For Pre Ramteke, who pays around £900 a month in rent before bills, the gap between her current expenses and the need to save for a deposit has widened. She estimates it could take three to four years to save enough for a deposit on a typical three-bedroom home.

Government response

Her concerns align with broader affordability challenges. The government is expected to provide further details of its "Your First Home" scheme, which aims to help more first-time buyers onto the property ladder. Estate agent Zunara Tariq of Oakmere Signature Homes notes that affordability remains one of the biggest issues facing buyers. "It's a really tough time to save for a deposit. Even people who are on big salary jobs are finding it really hard," she said.

Expert perspective

"Sometimes I do think that I'm trying to chase a dream that's going further and further away," Pre Ramteke told the BBC. The average interest rate on a new five-year fixed mortgage deal has hit 6% for the first time in three years, with house prices getting higher and higher.