The new energy price cap increase will mean that first-time buyers’ energy costs are to constitute over 15 weeks’ worth of mortgage payments.

This is up from around six weeks’ worth of mortgage payments at the same time last year, data from Twenty7tec has indicated.

Last year, energy bills were on average £1,339 per small residence, according to Ofgem, although following the recent increase to the energy cap, typical bills will rise to £3,549 for the same residence.

Twenty7tec’s analysis showed that the average first-time buyer house is currently costing £283,154, with a deposit of 23.75%. The mortgage technology firm’s figures suggested that the average first-time buyer is going for a 28-year mortgage and, at the best rate available for them in the market, will be paying £1,004.03 per month for a repayment mortgage.

However, while annual energy costs last year constituted 34.9% of one month’s take-home pay, following the recent price cap increase, annual energy costs will constitute 92.6% of one month’s take-home pay.

Twenty7Tec founder, James Tucker, warned that this rise will “eat into first-time buyers’ attempts” to save for a deposit for a home.

“A working housing market needs a functioning first-time buyer market,” Tucker said. “Together with the active buy-to-let market, it allows the rest of the property chain to keep moving smoothly. The energy price cap just announced will dramatically affect those looking to take their first step on the property ladder.

“Last year,  according to Ofgem, the average energy bill for a first-time buyer per household would have been £1,339. That was around one-third of one month’s take-home salary for first-time buyers. This year, the cap is rising to £3,549 and, according to our figures, now represents around 92.6% of one month’s take-home salary.

“The energy cap rise will eat into first-time buyers’ attempts to save for their house buying deposits, and it will hit those who have already purchased houses.

“Today, an average first-time buyer will be buying a home worth £283,154, with a deposit of 23.75%. They’ll be going for a 28-year mortgage and, at the best rate available for them in the market, will be paying £1,004.03 per month for a repayment mortgage.

“So the new energy cap increase is going to hit first-time buyer households to the tune of £2,110 per year compared to this time last year – equivalent to two whole months’ mortgage payments.”

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