Figures from Woolwich show that the average first time homebuyer in the UK is now being asked to hand over almost a third of their monthly income to meet mortgage demands.
And the debt management problems are most severe for young homebuyers in London, many of whom are now spending close to half of their incomes on mortgage repayments.
Andy Gray, head of mortgages at the Woolwich, commented: “For those in their 20s not already on the property ladder the outlook for getting on it doesn’t look good, especially with interest rates likely to rise further.”
“For those lucky enough to be on the ladder, the data suggests that in certain areas of London they are already stretched. The last thing any of them need is a further increase in base rates.”
Research from Abbey revealed earlier this week that millions of young consumers find themselves spending money they have put aside for a mortgage deposit.