The costs associated with buying a first home outright have surged by about two-thirds in nearly half a century, according to a think-tank.

People born in the 1980s have got the “rawest deal”, enduring rapid house price rises and tighter credit conditions, despite lower interest rates helping to ease mortgage borrowing costs, the Resolution Foundation said.

With older generations having been at the “sharp end” of high interest rates, a typical UK first-time buyer in 1974 would have paid £90,000 in net interest by the end of their mortgage, compared to £63,000 for a first-time buyer now, the research found.

Interest rates topped 10 per cent during the 1970s, 1980s and early 1990s. But while millennials – those of a mortgage to purchase their first home – two-and-a-half times as much as those in 1974, the report said.

An equivalent buyer in north east England will incur a cost of £150,000 – about 9% more than the typical first-time buyer in that region in 1974.

These variations make it potentially harder for young people today to move from one area to another, the report said.

The report, funded by the Nuffield Foundation, said a typical first-time buyer from the older baby boomer generation faced high mortgage costs in the first five years of home ownership – a time when they would have been at their most financially vulnerable with little equity in the property.

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Some £31,000-worth of interest would have been paid on a typical 1974 purchase in those early years, compared with £17,000 on a typical born between 1980s and early 2000s – have experienced a more favourable interest rate environment, with the Bank of England base rate at a record low, they have been hit by record house prices, as well as banks and building societies’ stricter lending requirements.

Bringing the different factors together, the report found the total cost of buying a first-time property outright has increased by about two-thirds, from £154,000 back in 1974 to £254,000 now.

The vast majority of the increase happened in the years running up to the financial crisis, with the biggest jump in housing costs therefore falling on the Generation X cohort born in the early 1970s, researchers found.

In London, a typical first-time buyer now faces spending £500,000- plus over the course of the lifetime purchase today. But millennials are struggling to get on the property ladder in the first place, the foundation argued.

The average deposit required to get on the property ladder has tripled in real terms over the past 20 years, from just shy of £11,000 in 2000, to £33,000 in 2020.

While a family headed by someone born in the early 1970s, with typical income levels, would have saved enough for a first-time deposit by the age of 22, it will take a family headed by someone born in 2002 up to their 36th birthday to save enough for a deposit.

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Lindsay Judge, research director at the Resolution Foundation, said: “The UK property market has long been a source of intergenerational strife. Baby boomers lament the 10%-plus interest rates when they first bought, while record house prices have pulled the property ladder away completely from many millennials.

“When you bring together all the costs associated with first-time home ownership, the lifetime costs of those properties have increased by two-thirds since the 1970s, and millennials have got the rawest deal of any generation.”

This stark barrier to entry explains why home ownership rates for people aged 30 have halved in the past 30 years, why typical first-time buyers are richer than they used to be, and why so many young people today are having to rely on the “bank of mum and dad”, the foundation said.

Alex Beer, welfare programme head at the Nuffield Foundation, said: “This important research highlights the many factors affecting housing affordability and how, in combination, they are increasing inequalities both between and within generations.”