Council of Mortgage Lenders CML
According to the Council of Mortgage Lenders CML, mortgage affordability for first-time buyers reached its worst level in 16 years. First time buyers are spending more than a fifth of their take home pay on mortgage interest alone, making in the worse period for many years in the affordability stakes.
A report also issued from Citizens Advice Bureau warns that low-income families are being encouraged to take out mortgages they cannot afford. It is a regulator requirement that suitability and affordability are taken into account when assessing a persons needs for a mortgage.
Our view
First time buyer mortgage affordability is crucial to the stability of the mortgage and housing market. It is first time buyers that technically drive the market as it is first time buyers that start most property chains. If there is no demand from first time buyers i.e. first time buyer mortgage affordability is low, then this has a knock on effect to the second mortgage and property level.
Expect further slow down in property in 2008.
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