First time buyer mortgage payments hit 15-year high

12-Jun-2007

First time buyers paid 18.7 per cent of their income on mortgage interest in April, new figures from the Council of Mortgage Lenders (CML) have shown.

The figure represents the highest such level since 1992, the CML has noted, and is a 0.4 per cent increase on the levels reported in March. Year-on-year increases now stand at 2.4 per cent.

Similarly bad news comes in the news that the number of first time buyers obliged to pay stamp duty has gone up, rising to 58 per cent in April compared with 51 per cent in April 2006.

"Month on month we see affordability constraints for first-time buyers worsening. And with the impact of May's interest rate rise still to be felt, many borrowers face higher costs in the coming months," advised Michael Coogan, director general of the CML.

"With first time buyers now needing to borrow record multiples of income to get a foot on the property ladder, it is little surprise that four in every five are taking out fixed rate deals," added Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors.

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