The average income multiplier for first-time buyers (FTBs) in the UK during June was 3.21 times their annual salary - the highest on record - according to figures from the Council of Mortgage Lenders (CML).
A similar figure from June 2005 shows that last year the average was just 3.06 times FTBs' annual income, demonstrating the significant impact of rising house prices in relation to average wages.
Despite the falling levels of affordability, the number of new home purchase loans and mortgages taken out went up by 14 per cent from May to June this year. The total number of first-time buyers (39,500) was the highest since December 2002 (44,000).
"It is interesting to see that even though average first-time buyer income multiples are the highest on record, first-time buyers are still finding ways of getting on to the property ladder," said CML director general Michael Coogan.
Mr Coogan said that he thought many first-time buyers were now increasingly turning to relatives, particularly parents or grandparents, to help them fund their first home purchase.
This, analysts say, is a sign of a gradual change in attitudes towards the different methods used to get a foot on the property ladder.To read more about mortgages, click here.
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