Bigger borrowing than ever for first-time buyers

Figures from the Council of Mortgage Lenders (CML) show that in June the average first-time buyer borrowed 3.21 times their income to get a mortgage, up from 3.06 times a year before.

Yet the amount of debt first-time buyers are taking on could be even higher commented CML director general, Michael Coogan: “It is highly likely that more and more young buyers are turning to parents and grandparents to help them raise the deposit for their first home.”

High levels of debt could have repercussions though – earlier this week the CML warned that the number of repossessions was at its highest level for five years.

With large debt to service compared to income, this means that many more people could end up having their home repossessed in the future.

However, Mr Coogan said it was encouraging that the majority of loans are fixed-rate mortgages, so at least borrowers can budget and plan for a fixed monthly repayment.