Getting mortgages ‘still challenging’ for first-time buyers

Despite the fact that the base rate of interest is currently at an historic low, prospective first-time buyers are still encountering significant financial hurdles as they attempt to get a foot on the property ladder, it has been claimed.

At the end of last year, the National Association of Estate Agents reported that the proportion of first-time buyers attempting to make their first purchase fell to its lowest point in a year in December.

Indeed, in the final month of the 2009, just 11 per cent of home buys were made by first-time buyers, compared to 43 per cent six months earlier.

And according to Firstrung, such a decline is understandable, particularly given the poor state of the employment market and the fact that lenders are still asking for high deposits.

“If we look at affordability the average joint income when we look at the figures for a couple looking to get their first property is about £35,000 to £40,000. The average property price at the moment is still £160,000,” chief executive Paul Holmes explained.

He said that this meant many first-time buyers whether singularly or together are still “miles away” from being able to afford to move.

Meanwhile, the Council of Mortgage Lenders recently reported that home buyers now need to put aside 10.6 per cent of their gross income to cover the interest payments on their mortgages.

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