First-time buyer mortgages 'halve in one year'

20/11/2008

Fewer first-time buyers took out a mortgage in September compared to the same period in 2007, according to the Council of Mortgage Lenders (CML).

The number of first-time buyers taking out a loan for a new home fell to 13,400 in September - less than half the 28,200 that took out a mortgage in September last year.

Borrowing by first-time buyers also dropped compared to August in a further indication of the continued squeeze on credit.

The amount borrowed by first-time buyers fell to an average of £104,500 in September, causing the first-time buyer income multiple down to its lowest level since March 2006.

CML director general Michael Coogan said: "Banks and building societies do want to support homeowners, but they have limited funds available and are, quite reasonably, taking a prudent approach to risk."

However, Mr Coogan remarked that it was "encouraging" that the increase in stamp duty had more than doubled the number of homebuyers avoiding paying the charge.

Tags; Housing Debt and Bills,

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