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First-time buyers `pay nearly one-third of income on mortgages`

05/07/2007

First-time buyers are paying a large proportion of their take-home income on their mortgages, new research reveals.

The most recent Woolwich Mortgage Affordability study reveals that these homeowners in their 20s - who are usually first-time buyers - are contributing an average of 32.4 per cent of their salaries to the mortgage payments.

Additionally, first-time buyers in some parts of London are putting nearly 50 per cent of their take-home pay towards their home loan payments, the figures indicate.

Andy Gray, head of mortgages at the Woolwich, said that these affordability issues mean the outlook for young would-be buyers who want to get on the property ladder "doesn`t look good".

"We fully expect the average age of first-time buyers to go up until people are well into their 30s," he said.

"For those lucky enough to be on the ladder, the data suggests that in certain areas of London they are already stretched."

Recently, data from PricewaterhouseCoopers stated that households contribute 19 per cent of their disposable income towards their debts and related interest.

Many debts unaffected by base rate cut 09/01/2009 - Yesterday, many borrowers welcomed the Bank of England’s base rate 1.5% base rate – an historic low 08/01/2009 - Today’s base rate cut by the Bank of England’s Monetary Gas price cuts expected 07/01/2009 - Energy company Scottish Power has announced the launch of a Personal debt about £1.5 trillion 07/01/2009 - The UK’s personal debt stands at around £1.5 trillion, according