Affordability gap widens says CML

Posted: 17 Jan 2007 10:53:34 GMT

The cost of the average home grew to 3.29 times the average combined incomes of couples looking for their first home during November, new figures have shown

The cost of the average home grew to 3.29 times the average combined incomes of couples looking for their first home during November, new figures have shown.

The gulf is the largest ever recorded, the Council of Mortgage Lenders (CML) figures showed, as the average first-time buyer mortgage climbed to £113,877.

Last week's surprise interest-rate rise will add more than £200 to the annual costs of a mortgage this size.

"First-time buyers should examine the benefits of taking out a fixed-rate deal for payment certainty in the next few years and make sure they are protected against any unforeseen changes in their personal circumstances," said Michael Coogan of the CML.

"Month-on-month we see affordability constraints becoming more pronounced for first-time buyers, and last week's interest rate rise will increase these pressures."

The average first-time buyer now uses a record 17.8 per cent of their income to cover the cost of their home.

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