First time buyer income multiples at highest ever level

11-Jul-2007

The Council of Mortgage Lenders (CML) has revealed that income multiples for first time buyers reached their highest ever level in May, up from 3.33 times the average income in April to stand at 3.37 times.

The CML study also shows that 60 per cent of first time buyers were forced to pay stamp duty in May, another record figure and an eight per cent year-on-year increase.

Mortgage interest payments, meanwhile, reached their highest level since 1992, up to 19.1 per cent from 18.7 per cent in April.

"For anyone wanting to get a foot on the property ladder or move house, each month affordability is becoming worse," advised CML director general Michael Coogan.

"As long as the economy continues to grow, most mortgage borrowers should be able to cope. But if the economy deteriorates, this data shows how desperately exposed first time buyers actually are, and just how irresponsible the lending has been," commented Vince Cable of the Liberal Democrats.

"With first time buyers more vulnerable to rising interest rates than those with an equity cushion any attempts to raise the stamp duty threshold would be welcomed as affordability for those at the bottom has worsen at a faster pace," added Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors.

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