First steps on property ladder prove tricky
Published On 13 February 2007
First-time buyers will find it increasingly difficult to make their first tentative steps on the property ladder, according to new figures. The Council of Mortgage Lenders (CML) has discovered that first-time buyers now have a mortgage – that is on average – 3.31 times their salary.
Put in context, the standard first-time buyer will have an income of £35,000 and borrow around £115,499.
Michael Coogan, CML director general, said: "The monthly figures clearly show the cumulative effects of the gradual worsening in affordability for first-time buyers – and the ever-rising proportion of them who are caught by stamp duty."
In December last year, just 41 per cent of first-time buyers could purchase a property below the stamp duty level of £125,000.
Oliver Gilmartin, Royal Institution of Chartered Surveyors spokesman, said: "The latest mortgage lending data indicates that demand activity in the housing market will remain firm in early 2007, despite three interest rate rises since August 2006.
"With new buyers borrowing record multiples of income, further rate hikes will increase strain this year, leading to even more homes being repossessed.
"As prices continue to rise, first time buyers are being hit by the extra burden of stamp duty with around 60 per cent now paying the tax compared to 50 per cent at the last budget."
