Mortgages ‘becoming less affordable’

While debt management difficulties continue to increase nationwide, the council has demonstrated that for first-time buyers in Britain the average percentage of their monthly income spent on mortgage repayments during March 2007 had risen from 16 to 18.3 per cent in 12 months.

In addition, concerns over potential debt management problems have prompted around 88 per cent of first-time buyers to take out a fixed-rate mortgage deal, which is the highest percentage ever recorded, according to CML statistics.

“Affordability constraints continue to be a barrier to home-ownership for many first-time buyers,” said CML director general Michael Coogan.

“With a rise interest rates widely expected later this week it is encouraging that those first-time buyers who are getting a foot on the property ladder are opting for fixed-rate products,” he added.

Earlier this year, the Consumer Credit Counselling Service forecast that British homeowners would be “on the rack” financially for the entire of 2007.