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13 June 2007

Average loan for a first-time buyer is £115,000

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by Kay Mitchell

Average loan for a first-time buyer is £115,000

According to figures published by the Council of Mortgage Lenders (CML), it has been established the average loan taken out by a first-time buyer has rocketed to £115,000.

Public sector key workers are having to borrow an average of 3 times their salary in order to get onto the property ladder. This is causing concern that millions are in danger of getting into debt

In April 2007, Britain’s 3.8 million first-time buyers were paying an average of 18.7 per cent of their monthly income on mortgage repayments. This is the highest figure since early 1992. First-time buyers were borrowing an average £36,000 against a salary of £16,000 in the early 1990’s.

The CML figures indicate that the rise in interest rates is forcing buyers out of the market. In April, there were 80,000 loans for property purchase, down from 89,000 in March. Around 29,000 of the loans went to first-time buyers, below the 33,000 in March and below the 30,800 in April 2006. It represents the lowest April number since 2002.

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