Fewer first-time home buyers in March

Fewer first-time home buyers in March

Higher interest rates and house prices that keep rising have driven some first-time home buyers out of the market, according to new figures released by the Council of Mortgage Lenders. Things are not likely to improve in the near future, as the Bank of England is likely to issue another interest rate hike this week in order to fight an inflation rate now at 3.1 percent according to Consumer Price Index numbers and at 4.8 percent using Retail Prices Index data.

New CML figures show there were 8 percent fewer first-time home buyers in March than a year ago during the same period, with only 33,100 first-time buyers during the month. Those who did purchase their first house in March had to borrow an average of 3.31 times their income. Last year in March, the average mortgage was 3.15 times the buyers’ income. That means that the proportion of a first-time buyer’s income going to interest in their loan has risen from 16 percent last year to 18.3 percent in the latest figures. That is the highest proportion of income going to interest payments in 15 years.

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