First-time buyers face unaffordable homes
January 17, 2007 by admin
Filed under News, News-Mortgages
First-time buyers were faced with the least affordable homes ever during November 2006.
That is according to the Council of Mortgage Lenders (CML), which has compiled data showing that the average homes cost 3.29 times the combined income of the buyers.
These figures represent the situation before the recent interest rate rises, meaning the market is likely to become even harder to get on to.
During November, the average mortgage for a first-time buyer was £113,877, with analysts saying that the recent interest rate rises will add a further £200 per year to the average mortgage.
“Month-on-month we see affordability constraints becoming more pronounced for first-time buyers, and last week’s interest rate rise will increase these pressures,” said Michael Coogan, CML director general.
Homeowners are now spending a record-breaking 17.8 per cent of their income on mortgage interest payments, but this has not stopped people from entering the market.
CML data shows that the number of first-time buyers is steadily increasing. In total, 37,000 people bought their first home in November, up from 35,300 in October.
“First-time buyers are clearly still keen to get on to the property ladder despite the growing financial hurdles, and it is essential that anyone wanting to buy their first home should look carefully at their finances and take a realistic view as to whether they can afford the costs of home-ownership if rates continue to rise,” added Mr Coogan.
