Nationwide reveals first-time buyer obstacles

20 June 2006
It is not only the price of property in the UK that is causing problem for first-time buyers, according to new research, but lending requirements are taking their toll as well.

A study conducted by Nationwide has revealed that mortgage lenders have failed to evolve at the same level as interest rates, meaning that first-time buyers are encountering borrowing obstacles.

It found that many people seeking to get on the property ladder could afford to make the monthly mortgage payments, but struggle to cover the initial costs involved.

As mortgage providers currently lend at an average of 3.1 times income, the gap between amounts offered and the cost of houses has increased.

Fionnuala Earley of Nationwide said: "Overall it is not the financing of the loan that is the biggest obstacle to the fresh-faced first-time buyer – rather it is finding the deposit necessary after the income multiple constraints."

Despite the fact that many perceived first-time buyers are in fact people returning to the property market with a better financial situation behind them, Ms Earley said: "For many true, and particularly young, first-time buyers, the deposit and income multiple constraints are too strong and prevent them entering home ownership at all."

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