First time buyers are borrowing more than ever before.
They are borrowing far more than compared to their income, it is evident.
Council of Mortgage Lenders (CML) illustrate that in July home owners borrowed 3.24 times their income in order to purchase their first property .
That is the highest ever recorded since records were begun in 1974.
First-time buyers continue to find ways of getting onto the property ladder, showing how popular owning their own home is to young people.
The average first-time buyer mortgage was £110,000 in July, representing 90% of the property value that they were buying.
Purely paying interest on such a loan takes 16.7% of the average first-time salary of £34,216.
This is going to rise further given August's 0.25% increase in the UK base rate.
Economists have stated that this means that prices could come under pressure in the following months.
Should house prices continue to increase, factors facing first-time buyers are going to become more daunting. They are highly likely to be squeezed out of the market.
Mortgage interest rate payments are likely to rise further should the Bank of England increase interest rates again prior to the end of the year, which is highly likely.
Increasing unemployment as well as soaring utility bills add to the pressure on the majority of first time buyers.
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First Time Buyers Borrowing Extensively
Wed, 20 Sep 2006
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