Things have been a real struggle for first time buyers over recent years. After battling to get onto the property ladder many have had to face crippling repayments and strained finances, with affordability levels for first time buyers falling to their lowest level since 1991. With affordability at a sixteen year low for first time buyers, the financial strains have taken their toll.
Recent figures show that the average first time buyer has had to spend around 35% of their income on their mortgage, as well as face other rising costs such as petrol price increases, higher food costs, and rising energy prices.
Over recent years it is become increasingly difficult for non-homeowners to get onto the property ladder, and those who have managed to struggle on to the first rung have had to take out huge loans due to high property prices, pay higher interest due to increases in the base rate, and have had to take the loan out over a longer repayment period in order to try and keep monthly repayments down. Many have had nothing to put down by way of a deposit, so have had to mortgage themselves to the hilt, all of which has left them facing crippling repayments on their mortgage.
One industry official stated that this, combined with the other rising costs that first time buyers, like all other consumers, are having to face equates to a worrying situation.
He stated: ‘This is a disaster waiting to happen. The situation may be even more serious than it was in 1991 because so many other costs are spiralling. The financial squeeze may be too great for many. The extraordinary prices for petrol, gas and electricity combined with mortgage payments will push people over the edge. It will have a devastating effect on many people’s lives.’
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