More people 'will have to rent for longer'
Published: 05-Jul-2007
More and more young people may have to live in rented accommodation for longer as rising house prices and interest rates are making it increasingly difficult for first-time buyers to get on the property ladder.
The latest Woolwich Mortgage Affordability research shows that a person in their 20s looking to buy a home will have to spend 32.4 per cent of their household income paying their mortgage.
In June, the typical first-time buyer in their 20s had to spend £586 per month on the debt. Just five years ago, the figure was £233 less.
In particular, young Londoners look like they will have to rent for a long time before they can afford to buy their own property - some people in the capital would now have to spend 40.5 per cent of their income on a mortgage.
"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," explained Andy Gray, the head of mortgages at the Woolwich.
"We fully expect the average age of first time buyers to go up until people are well into their 30s."
Later today (July 5th), the Bank of England will decide whether interest rates should rise again. Many experts think that they will increase by 0.25 per cent.
