First time buyers in November were faced with the least affordable homes in history, so show new figures.
Council of Mortgage Lenders (CML) data shows that the average first home costs 3.29 times buyers' combined income.
That is before recent interest rate rises and increasing mortgage costs are included.
Affordability is placing severe restraints on first time buyers, with last week's interest rate rise adding pressure.
November saw the average first time buyer mortgage creep up to £113,877. In addtion, the current increase in interest rates is going to add more than £200 per year to mortgage payments on top of this amount.
The increase in size of mortgages and interest rates have added pressure to that percentage of income first time buyers use to pay mortgage interest, rising to a record 17.8% in November.
Furthermore, 56% of first time buyers presently pay stamp duty on their first homes. This figure was 48% in January 2006.
Despite soaring costs, the number of first time buyers are increasing, with 37,000 first time buyer mortgages being sold in November 2006. This figure was 35,300 in October 2006.
First time buyers need to examine the benefits of a fixed rate deal for payment which brings about some certainty in the following years. This ensures that they are shielded against any unforeseen changes in their personal circumstances.
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First Time Buyers Have Highest Costs Ever
Wed, 17 Jan 2007
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