Average mortgage costs hit first time buyers

Average mortgage costs have risen significantly over the past few years, according to newly published figures.

The UK Housing Review, compiled by the Chartered Institute of Housing and the Building Societies Association (BSA), revealed that the average first time buyer had to spend nearly 35 per cent of their income on mortgage repayments in the last quarter of 2007.

This compares to the previous high of 34 per cent, recorded at the peak of the previous housing boom, in 1990.

Commenting on the figures, the review's author, Steve Wilcox, claimed that they had contributed to the growing popularity of rental property, a situation that offers the potential for interest in buy to let mortgages among landlords looking to take advantage of that demand.

"Private renting has become far more competitive as an option for households compared to the cost of buying the sector has grown by 21 per cent in the last five years across the UK and is fulfilling a significant role in the housing market," he said.

Adrian Coles, director general of the BSA, added: "With first time buyers finding it increasingly difficult to get a foot on the housing ladder, the private rented sector is providing good quality accommodation to increasing numbers of people."

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