Money News
16th August 2008
'Conditions continue to worsen for first time buyers
First time buyers are spending more of their income on house purchases than at any time over the last 34 years, it has been revealed.
Investment banking giant Citigroup calculates that the combined cost of a deposit, a year of repayments accounts for 69 per cent of a couple's annual income.
This is the highest proportion which a novice homebuyer has had to commit to house purchase since 1974, the Observer reports.
The trend has been attributed to the higher repayments on home loans and larger deposits being demanded by mortgage lenders, as they tighten up their lending criteria in the face of the credit crunch.
News of the findings comes as separate research from Nationwide found that the average deposit currently being demanded from first time buyers stands at £17,300.
This compares with a down payment of £13,160 this time last year.
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