Affordability worsens for first-time buyers

Affordability has worsened for first-time buyers, according to the Council of Mortgage Lenders.

The body claims that higher interest rates are forcing mortgagees – and first-time buyers in particular – to spend a higher proportion of their income on mortgage repayments.

Statistics collated by the CML revealed that first-time buyers in March spent over 18 per cent of their income on mortgage interest payments.

This was a slight increase on February figures – and more than two per cent higher than the same period last year.

Commenting on the data, CML director general Michael Coogan said: “Affordability constraints continue to be a barrier to home-ownership for many first-time buyers.”

And he added: “With a rise in interest rates widely expected later this week, it is encouraging that those first-time buyers who are getting a foot on the property ladder are opting for fixed-rate products.”

Analysts are almost unanimous in predicting the base rate to be raised again on Thursday following the news that inflation breached a three per cent upper limit in March.

© Adfero Ltd

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