First-time buyers ‘unable to get on the property ladder’

Posted 2008-06-3

First-time buyers are being squeezed out of the housing market and are unable to afford homes in their local area, it has emerged.

A report from Hometrack asserts that 28.3 per cent of would-be homeowners are unable to afford a property in their locality.

First-time buyers in London and the south-west are in the worst position, with 41 per cent and 40 per cent respectively being unable to get on the ladder.

The company attributes these problems to growing house prices in previous years and rising costs in other areas such as food and utilities which have seen the average mortgage cost for first-time buyers grow by 12 per cent over the past year.

People who want to a buy a property are now spending an average of 34.5 per cent of their salaries on mortgage repayments.

Richard Donnell, director of research at Hometrack, said that while mortgage rates for first-time buyers have increased, changes to the availability of mortgages has had the greatest impact on their ability to buy.

In related news, the Bank of England has revealed that mortgage approvals for April fell to a 15-year low.

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