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First-time buyers `take on record mortgage debt`

15/08/2007

First-time buyers took on a record amount of mortgage debt during June, data from the Council of Mortgage Lenders (CML) reveals.

Those who are buying for the first time borrowed an average of 3.37 times their salary in June, while the proportion of income put towards mortgage interest payments also increased to 19.3 per cent.

The findings also suggested that first-time buyers have been affected by the five interest rate hikes seen in the past year, as the figures show falling mortgage numbers.

According to the CML, the number of home loans to first-time buyers fell to 35,600 in June, compared with 39,800 mortgages during the same month in 2006.

Bernard Clarke, a spokesman for the CML, told the Guardian: "We`ve had a long period, a decade almost, in which house prices have been rising much more quickly than incomes.

"This has been offset to some degree by low borrowing costs, but with rising interest rates the problems for first-time buyers have become more pronounced."

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