First time buyers 'over-stretch' to reach property ladder

14-Sep-2006

According to data recently published by the Council of Mortgage Lenders (CML), first time buyers are now borrowing up to 3.21 times their annual salary, spending 16.7 per cent of their monthly salary on mortgage payments.

"First time buyers are continuing to find ways of getting a toehold on the property ladder, showing just how popular home-ownership is to many young people," said Michael Coogan, director general of the CML.

"But higher income multiples, coupled with higher interest payments as a proportion of income, suggests that they are continuing to stretch themselves to do so," he added.

A reduction in the number of first time buyers taking out fixed-rate mortgages is a further indication that buyers are struggling to keep up with rising house prices; in July, 65 per cent of first time buyers opted for fixed-rate mortgages, three per cent fewer than in June.

The CML is the trade association for the UK's mortgage industry.

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