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First-time buyers are 'struggling to keep up with mortgage costs'

09/05/2007

First-time buyers in Greater Manchester and elsewhere are spending more of their income on mortgage payments, which "largely reflects" increases in interest rates, according to a leading industry body.

The Council of Mortgage Lenders (CML) has found that new buyers spent, on average, 18.3 per cent of their income in March on mortgage interest payments, compared with 16 per cent in the same month last year.

It was also found by the CML that the income multiples of first-time buyers have grown over the past year to 3.31 times, up from 3.15 in March 2006.

"Affordability constraints continue to be a barrier to home-ownership for many first-time buyers," said CML director-general Michael Coogan.

"Mortgage lenders are trying to help by offering innovative products where appropriate but will want to ensure lending remains prudent."

According to the CML, growing costs are deterring many potential first-time buyers from climbing on to the property ladder, with numbers falling by eight per cent in 12 months.

The Royal Institution of Chartered Surveyors agreed with the findings and said that with the strong likelihood of more interest rates hikes, affordability levels will probably deteriorate further over the next few months.

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