According to the Council of Mortgage Lenders the average first time buyer is taking on a mortgage based on 3.2 times annual income. This is apparently the highest figure on record.
Despite the higher income multiples the number of first time buyers rose by 14%.
The Council of Mortgage Lenders believes that families are now more likely to help with deposits, in order to help first time buyers onto the property ladder.
Our view
Rises in house prices have meant many would-be first time buyers being unable to afford property. The recent rise in interest rates will also not have helped.
For those buyers on decent salaries, saving the deposit for their first home is a good discipline so letting families help out could be bad news. The flip side is that saving may take a while and house prices just seem to keep growing and may be out of reach.
Many lenders now look at affordability for borrowers, rather than income multiples. These are more realistic because they take into account whether the mortgage payments can be met and include other outgoings.