First-time buyer mortgages soar

8th August 2006

First-time buyers are now borrowing record amounts, relative to their income. The Council of Mortgage Lenders says the average first-time buyer borrowed 3.21 times their income in June; that’s the highest on record.

New figures from the Council of Mortgage Lenders also show that the number of first-time buyers taking out mortgages went up by 14% in June, to 39,500 – the highest number since December 2002.

The CML noted that even though average first-time buyers were borrowing record amounts relative to their incomes to secure mortgages, they were still finding ways of
getting onto the property ladder.

Michael Coogan, who’s the director-general of the Council of Mortgage Lenders, said: “It is highly likely that more and more young buyers are turning to parents and grandparents to help them raise the deposit for their first home.”

The CML also revealed that more people are taking out tracker mortgages; 38,000 tracker deals were signed in June; that’s up 24% from 30,000 in May. Fixed-rate products were also popular with people looking for security; accounting for 68% of all mortgages, up from 57% the year before.