First time buyer income multiples reach new high

11-Sep-2007

First time buyers took out a loan worth an average of 3.39 times their salary in July, the Council of Mortgage Lenders (CML) has revealed, with the organisation adding that the number of first time buyers coming to market fell sharply.

Seven per cent fewer prospective homeowners took out loans in July, with the number standing at 32,400, the CML noted, with the value of first time buyer loans falling by four per cent to £4.4 billion.

First time buyers are now committing almost a fifth – 19.7 per cent – of their income to meet mortgage repayments, the organisation added.

"A slight fall in lending between June and July has emerged for the third year in a row, so of course we cannot read too much into a single month's figures," cautioned Michael Coogan, director general at the CML.

"But the long-anticipated slowdown in the housing and mortgage markets may now be beginning to materialise," Mr Coogan added.

However, last week estate agency Haart announced that it expected first time buyer numbers to pick up later this year now that price growth is moderating and interest rates stabilising.

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