The property price-to-earnings ratio for newcomers to the housing market has contracted to 5.9 times average earnings from 6.2 a year earlier

First-time buyers face an easing of financial pressure following a combination of declining interest rates, income growth and subdued property valuations, according to recent analysis by Lloyds Banking Group.

The property price-to-earnings ratio for newcomers to the housing market has contracted to 5.9 times average earnings from 6.2 a year earlier. This reflects a typical purchase price of £237,518, representing a 2.4% rise, whilst average earnings have increased to £40,021, up 6.2%.

The threshold now sits at its most accessible level since the final quarter of 2015, when it also registered at 5.9.

Monthly mortgage payments for first-time buyers have increased 0.1% to £1,087 over the same period. The advance in underlying property costs has been offset by declining mortgage interest rates. The average five-year fixed rate on a standard first-time buyer mortgage—calculated on a 30-year term with a 10% deposit—has dropped from 4.7% to 4.5%.

When measured as a proportion of monthly income, mortgage repayments have receded from 34.6% to 32.6%, the lowest share recorded since mid-2022, prior to the sharp rate rises that followed.

Buying your first home is still a big challenge, but things are moving in the right direction, said Amanda Bryden, head of mortgages at Lloyds. 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.

She said: Big national numbers often make the headlines, but the reality is that the housing market can look very different from one town to the next. If you’re searching for your first home, being flexible on location can really help – sometimes moving just a few miles from your preferred area can unlock much better value.