It has become a lot more difficult
first time buyers to purchase
property .
Council of
Mortgage Lenders (CML) data depicts that in March new home buyers spent about 18.3% of their income on
mortgage interest payments, the highest percentage since 1991.
Brits are also borrowing more to finance their first home, with average income multiples rising to 3.31, up from 3.15 times in March 2006.
Those buying for the first time dropped 8% compared with March 2006.
As interest rates are about to increase, 88% of first time buyers opted for a
fixed rate mortgage, the highest percentage ever, with 78% of all
loans being fixed rate forming another record.
An increase in interest rates expected later in the week is to encourage first time buyers who are getting a foot on the property ladder opting for fixed-rate products.
Affordability remains a barrier to home ownership for most first time buyers. Mortgage lenders are attempting to assist by offering innovative products wherever possible in ensuring lending remains up to date.
People wanting a fixed rate mortgage are still able to secure a
home loan charging less than 5%, days before an expected increase in UK base rate to 5.5%.
14 lenders are currently offering fixed rate
home loans charging under 5%. However, these have average application fees of £2,062 so figures from MoneyExpert.com show.
