First time buyers at risk from rate rises

24-Jan-2007

Rate rises are putting already strapped first time buyers at risk, research has revealed.

Mortgage information team mform.co.uk has flagged concerns that around 228,000 property owners aged unde 25, many of whom were first time buyers within the last two years, spend more than £9,000 a year on mortgage repayments.

Particularly at risk are the eight per cent of homeowners in this age group - around 101,000 people - who spend more than 50 per cent of their monthly income on mortgage repayments.

A further 44 per cent spend 31 per cent or more of their monthly income for the same purpose.

Francis Ghiloni, marketing and business development director for mform.co.uk, said: "As…mortgage rates rise, people are going to have to use more of their income to pay their mortgages, which will put many under considerable financial strain."

She added: "We estimate that between 2002-03 and 2006, the true cost of a mortgage increased by around 33 per cent."

The Bank of England raised its base rate by 0.25 per cent this month.

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