Interest rate rises 'starting to bite'

16-Apr-2007

First time home buyers may be feeling the effects of recent interest rate rises, an expert has claimed.

According to research by MoneyExpert.com, recent interest rate rises have played a part in more than 460,000 mortgage applications - which may have included the applications of would-be first time home buyers - that have been declined over the last six months.

At a monthly rate, the number of refusals equates to more than 77,000.

"Lenders quite reasonably do not want to take risks when there are pressures on how much people can afford," said Sean Gardner, chief executive of MoneyExpert.com.

"Affordability is the major issue in the mortgage market as recent reports of a drop in the number of first time buyers demonstrates," he added.

Indeed, according to MoneyExpert.com, those within the 18 to 34 age bracket are the worst hit.

In related news, although interest rates remained static in April, a further increase is expected in May, according to Javno.

To find out about the different ways of financing a first home, see our section ‘Affording Your First Home’.

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