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Graduates 'priced out of the property market'

27 July 2007

Graduate first-time buyers (FTBs) are finding it increasingly difficult to get on to the first rung of the property ladder, according to a new report.

The annual Scottish Widows Bank Graduate First Time Buyer report suggests that anecdotal evidence that FTBs are struggling to afford the deposit and Mortgages.aspx">mortgage rates on a property amid a soaring market has a statistical basis.

In the study, which focuses on graduates, 70 per cent of those asked said unaffordable house prises are squeezing them out of the market.

With the average property price for graduate FTBs in London now at almost £180,000 - against a backdrop of a housing market in the capital which has seen average prices top £300,000 according to Halifax - it is little surprise problems of affordability are becoming more acute.

Richard Clark, head of product development and marketing at Scottish Widows Bank, commented: "This year's report reveals that the situation really is getting worse for graduates.

"The main issue is that property prices and inflation are continuing to rise, but starting salaries have not moved in line with this."

With the base rate rising for the third time this year at the start of the month to 5.75 per cent, the repayments for Mortgages.aspx">mortgages are also on the increase.

Increasingly consumers are now having to seek out strong Loans.aspx">loan deals and pick out the best deal in a competitive market.

With most experts tipping the base rate's upward trajectory to continue, graduates look set to face a challenge finding the right Mortgages.aspx">mortgage.

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