First time buyer mortgages 'taking up a third of income'

05-Jul-2007

First time buyers are now being forced to use almost a third of their take home income on mortgage payments, it has been revealed.

This figure rises to almost 50 per cent in some parts of London, according to research from the Woolwich.

Figures for June show that first time buyers now spend 32.4 per cent on their income on their mortgage, compared to the 20.1 per cent spent by the average homeowner.

"For those in their 20s not already on the property ladder the outlook for getting on it doesn't look good, especially with interest rates likely to rise further. We fully expect the average age of first time buyers to go up until people are well into their 30s," advised Woolwich head of mortgages Andy Gray.

"For those lucky enough to be on the ladder, the data suggests that in certain areas of London they are already stretched. The last thing any of them need is a further increase in base rates," Mr Gray added.

An increasingly large proportion of first time buyers are now prepared to pay for mortgages worth up to six times their salary, according to research published last month.

"Whilst an interest rate rise does mean that most of us with mortgages will be stretched a little, hopefully the latest increase will mean that a slowing down in house price growth results in more aspiring home owners soon being able to take that first step towards home ownership," suggested Helen Adams, Managing Director of online advice centre for first time buyers, FirstRungNow.com .

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