YORK first-time buyers now pay a third of their salary on mortgage payments on average, a study has found.

The new figures are in line with the Government's new First Homes scheme which offers homes at a discount of 30 per cent compared to the market price.

The scheme is designed to help first-time buyers and key workers onto the property ladder in their local areas where people may need to move to another city to afford their first home.

Compiled by online mortgage broker Mojo Mortgages, the first Homes scheme affordability index looked at various factors affecting home affordability in 2021.

This included house prices, average annual salary and monthly take home pay to work out where in England was most and least affordable.

But the average monthly mortgage payment for first-time buyers in York now takes up nearly a third of the average salary in the city.

Based on the average monthly mortgage payment as a percentage of income, the average monthly mortgage repayment in York now takes up 30.34 per cent of a couple’s take home pay. That's above the national average of 27.01 per cent.

This is based on an average property price in the city of £312,083 and an average annual salary of £29,048.

Oxford was the least affordable location for first-time buyers with the average mortgage repayments making up 49.37 per cent of the average take home salary.

Bath - 47.65 per cent - and London - 47.12 per cent - followed close behind.

It is hoped the First Homes scheme could make a significant difference to a first-time buyer's monthly outgoings once on the property ladder - in terms of mortgage payments as well saving for a deposit.

Nisha Vaidya, mortgage expert at money.co.uk, said: “A home is one of the largest purchases you’ll make and it can be difficult to understand how much you can afford. There are many factors, like your salary, regular outgoings, and debt-to-income ratio that will impact whether a home is within your reach.

“A good rule of thumb is to allocate no more than 35 per cent of your gross income to your monthly mortgage repayments.

"Any more than this and you could become 'house poor', where you own a house, but lack the funds to do other important things such as saving money or going on holiday.”

Under the scheme, the discounts will apply to the homes forever, meaning that generations of new buyers and the local community will continue to benefit every time the property is sold.

Cassie Stephenson, director of mortgages at Mojo Mortgages, said: “While of course it’s important to remember the 30 per cent + discount will apply throughout the lifetime of the property and will apply when you eventually sell for the first time, a First Homes scheme property is still very much worth considering regardless of location as an option for first-time buyers looking to get onto the property ladder.

“The savings available - particularly allowing first-time buyers access to higher LTV mortgages through reduced deposits - could also mean better access to lower interest rates and improved overall savings across the lifetime of a mortgage. Plus of course, purchasing a home is a significant long term investment towards your financial future as opposed to lining a landlord’s pocket.

“We’re excited to see how this new scheme develops over the coming months as new properties and developments continue to crop up across England.”