Nearly half of FTB incomes used to make mortgage repayments

According to the results of a recent report many first time buyers in the UK are spending around forty percent of their net salary on making mortgage repayments. With rising house prices in the UK coupled with a number of interest rate hikes over the past few months, many first time buyers are having to spend more and more of their salaries in order to keep up with their mortgage repayments, and some are struggling to keep up with repayments following yet another interest rate rise in January.

However, although nearly half of the net salary of the average first time buyer is going towards repayments on their mortgage, it is not all doom and gloom. According to some experts, many first time buyers are being sensible and realistic when it comes to taking out and repaying a mortgage, and are not setting their sights on properties and mortgages that are way out of their league, and could quickly leave them in an unmanageable situation.

Paul Holmes, an official from mortgage company Firsrung, stated: "Of all the applications we receive I would say 95 per cent of the mortgage applications that we process are below £150,000, which would suggest to me that the average first-time buyer's expectations are very reasonable." He added that many first time buyers are well aware of the pros and cons of taking on a mortgage considering the house prices, expert predictions with regards to continued growth, and rising interest rates.

A number of first time buyers have managed to avoid the pinch of the recent interest rate hikes by taking on a fixed rate mortgage. However, there are a number of lenders that have now suspended fixed rate deals due to the amount of interest in this type of loan, which has reduced the options for more recent first time buyers.

Tom Smith
06.02.07

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