Mortgages costing 'third of wages'
Updated on 05 July 2007
First-time buyers are spending nearly a third of their pay on mortgage repayments as a result of rising house prices and interest rates, new figures suggest.
The average person in their 20s now spends 32.4% of their total household take-home pay on their home loan, according to the Woolwich.
The situation is even worse for young people in London, where mortgage repayments account for nearly 50% of their earnings.
Across all age groups people spent an average of 20% of their income on their mortgage during June - the highest figure since the Woolwich first started the research in 2002.
Andy Gray, head of mortgages at the Woolwich, said: "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.
"We fully expect the average age of first-time buyers to go up until people are well into their 30s.
"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."
People in their 20s spent an average of £586 on mortgage repayments during June, £233 more than they spent five years ago.
The research, based on 125,000 Barclays customers in their 20s, found the least affordable area for first-time buyers is the London borough of Brent, where people in their 20s spent an average of £853, or 48% of their take-home pay, on mortgage repayments during June.
The most affordable area is the Staffordshire Moorlands in the West Midlands, where repayments average just £301 or 19% of pay.
These news feeds are provided by an independent third party and Channel 4 is not responsible or liable to you for the same.
