First-time buyers 'are struggling to raise mortgage deposits'
Published On 30 January 2008
It is becoming harder and harder for first-time buyers to manager to save the deposit required to get a mortgage and buy a home, a new study has warned.Figures released by the Royal Institution of Chartered Surveyors (Rics) showed that a couple both on lower quartile earnings, would have to save up the equivalent of 104 per cent of joint take home pay to build up the typical deposit needed to get a mortgage and a home.
In 1996, the same couple would have needed just 23 per cent of their take home pay to cover a property's deposit.
What's more, the Rics data indicated that a first-time buyer couple now has to spend 40.3 per cent of their combined take home pay to service their mortgage.
As a result of this, Rics predicted that more and more people would fail to keep up with their mortgage payments in 2008 and face repossession.
"Mortgage lenders are demanding ever higher deposits as the credit crunch continues to take effect," Rics senior economist David Stubbs explained.
"Those who are struggling with mortgage repayments are still faced with paying a large percentage of take home pay but there may be some release of pressure as earnings continue to rise."
