First-time buyer numbers dwindling

The necessity of tailored first-time buyer mortgages to boost the number of people entering the property market has been illustrated by figures from the Council of Mortgage Lenders (CML) showing that some 35,600 loans went out to new buyers in June.

This is down from the 39,800 mortgages that went out in June 2006 but up slightly from the 34,600 in May.

For the month of June, however, the 35,600 loans is the lowest figure since 2004, when 33,600 first-time buyer mortgages were agreed.

Affordability appears to be the major obstacle facing new buyers, with income multiples reaching a record 3.37 times the average customer's income in June and 19.3 per cent of income being spent on interest payments.

For those first-time buyers that did manage to get on the property ladder, fixed-rate mortgages were the most popular, with 90 per cent of customers opting for one.

In other areas of the market, the number of loans to home movers fell to 66,300 in June, compared to 71,100 in the same month last year, and fixed-rate loans accounted for 76 per cent of all mortgages.

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