First time buyers still struggling to get onto property ladder
According to a report from the Council of Mortgage Lenders first time buyers are still struggling to get onto the property ladder, with costs for first time buyers on the rise.
The Council of Mortgage Lenders states that homeownership for first time buyers is becoming increasingly expensive. In its latest figures the CML claims that the average first time buyers is spending 20.4% of their monthly income on mortgage interests payments. This is at its highest level since 1991.
According to the report the number of loans granted to first time buyers fell in September to 28,400, which was a fall from the August figure of 34,800. Officials from the Council of Mortgage Lenders think that high interest rates have impacted on affordability for first time buyers. However, officials from the CML hope that interest rates have now peaked, which could increase affordability for buyers.
CML director general Michael Coogan stated: "The Bank of England's decision not to reduce rates earlier this month will have disappointed many borrowers. Looking forward, affordability is likely to continue to constrain buying activity, which we expect to remain subdued."
The figures also showed that in September the average first time buyer mortgage was for £118,750, which was a marginal drop from the August figure of £119,000. One industry official stated that many first time buyers were losing out to buy-to-let investors.
She stated: "The gap between those who can afford to buy and the hundreds of thousands of people forced reluctantly to rent is huge and widening. First-time buyers are trying to compete with property investors, but find themselves on the wrong side of the wealth divide."
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