Let’s be honest — buying your first home in Lancaster can feel daunting. The typical first-time buyer property now costs around £171,242, which is a big commitment for anyone.
The headlines often focus on house prices compared to average salaries, making things sound impossible. But that’s not really how buyers think. When most people start looking, the question isn’t “how many times my income is the house worth?” It’s “how much of our take-home pay will go towards the mortgage each month?”
And when you look at it that way, the picture for Lancaster’s first-time buyers isn’t quite as gloomy as it seems.
Right now, mortgage payments account for 27.3% of a typical Lancaster household’s income. That’s not insignificant — but it’s also not the worst we’ve seen. In fact, there were times when things were much tougher.
The Late 1980s and Early 1990s
Let’s rewind to the late ‘80s and early ‘90s. House prices in Lancaster were far lower — around £40,405 in 1990 — but interest rates were eye-watering at 14.4%.
Back then, first-time buyers were spending 37.7% of their income on their mortgage payments. To put that in perspective, that’s 10% more of their pay than buyers today.
So while homes were cheaper on paper, the reality was much harsher. Affordability — the amount of income swallowed up by housing costs — was worse than it is today.
The 2007 Squeeze
Fast-forward to 2007, just before the financial crash. Lancaster’s first-time buyers were again facing a tough climb, spending 37.1% of their household income on mortgage payments.
Sound familiar? It’s a pattern that repeats every few decades — peaks and squeezes, followed by periods of relief.
So when people say, “it was easier in our day,” the numbers tell a different story.
The 2023 Peak and the Recent Shift
2023 was another challenging year. Rising interest rates pushed affordability to 28.7% of household income — the highest in more than 15 years. Some buyers understandably decided to pause their plans.
But things have been improving. In 2024, that figure dropped to 27.9%, and by 2025, it eased further to 27.3%. It’s still demanding, but heading in the right direction — a sign that the market is stabilising.
Why the Headline Numbers Don’t Tell the Full Story
Many people focus on the asking price of a home, but that only tells part of the story. What really matters is how affordable the monthly payments are compared to income.
For example, a £200,000 home with a £190,000 mortgage might sound daunting, but if the payment is around £995 a month, and wages have grown, it becomes more manageable than you might think.
The Bigger Picture
Across the UK, the real value of property has fallen when adjusted for inflation.
In 2022, the average UK home was about £270,000. With inflation of 11.45% since then, that same home would need to be worth £304,000 just to keep pace. Instead, it’s around £270,400 today — meaning, in real terms, homes are effectively 11.3% cheaper.
Meanwhile, wages have risen 16.28% over the same period, outpacing inflation by nearly 5%. So, while house prices have stayed flat, buyers’ spending power has improved — something that doesn’t always make the headlines.
Add in the fact that mortgage rates are slowly edging down and that there’s now more choice on the market, and it’s clear the balance is beginning to shift in favour of buyers once again.
Putting It in Perspective
Buying your first home in Lancaster will never be “easy.” It takes planning, saving, and courage to make that commitment. But it’s important to remember — this isn’t a uniquely impossible time. Previous generations faced far tougher affordability challenges and still managed to buy.
If you’re thinking about taking that first step, focus on what you can control — your deposit, your monthly budget, and the type of home that suits your lifestyle. There’s always a way forward, and Lancaster’s market still offers plenty of opportunity for those ready to make their move.
Does this surprise you? Whether you’re a parent remembering your own first home or a first-time buyer working out your next move, we’d love to hear your story. How much was your first mortgage payment — and how does it compare to today?
Thanks for reading. If you would like to discuss anything property, please get in touch. You can call me on 01524 843322 or email me at james@jdg.co.uk.
Thanks for reading
James