First-time buyers 'feel the pinch'
Published On 5 July 2007
First-time buyers 'feel the pinch'First-time buyers are spending a large proportion of their take-home pay on their mortgage, new figures reveal.
Data gathered by the Woolwich shows that rising interest rates and house prices mean that many first-time buyers are having to spend nearly a third of their total household take home income servicing this borrowing.
The Woolwich Mortgage Affordability research shows that first-time buyers in their 20s are now spending 32.4 per cent of their income paying for their mortgage.
The typical buyer in London in their 20s has to spend 40.5 per cent of their income to service this debt.
"For those in their 20s not already on the property ladder the outlook for getting on it doesn’t look good, especially with interest rates likely to rise further," explained Andy Gray, head of mortgages at the Woolwich.
"We fully expect the average age of first time buyers to go up until people are well into their 30s. For those lucky enough to be on the ladder, the data suggests that in certain areas of London they are already stretched.
"The last thing any of them need is a further increase in base rates."
The Bank of England's decision about interest rates in July is due later today (July 5th).
