First-time buyers face record income multiples

First-time buyers are shouldering unprecedented income multiples of mortgage debts to help them afford their first home, figures from the Council of Mortgage Lenders (CML) have shown.

The average amount borrowed in June was 3.37 times income, compared to just 3.22 times buyer income in June 2006.

Meanwhile, those who had already secured a place on the housing ladder were operating under constraint when making repayments, devoting 19.3 per cent of their take-home pay to paying off mortgage debt, CML statistics revealed.

With affordability constraints still tightening, fewer first-time buyers are on the market, with just 35,600 first-timers taking out mortgages in June compared to 39,800 one year previously.

A cautious approach to home purchase was also indicated by the higher-than-average tendency to choose fixed-rate loans among first-time buyers, with nine in ten choosing to avoid making their mortgage repayments dependent on interest rate fluctuations.

According to the CML, 38 per cent of first-time buyers aged under 30 required financial assistance from their parents to help them buy a home in 2006.

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