CML: Property market outstripping earnings

03 February 2005
The rising cost of houses is beginning to impact on Britons' ability to afford homes in the UK, it has emerged.

A new study by the Council of Mortgage Lenders (CML) suggests that housing affordability dramatically worsened in 2004 right across the UK, with the cost of a mortgage spiralling upwards.

In its annual review of market developments the CML recorded a sharp increase in house prices in Wales and Scotland, where rises of 28 per cent and 22 per cent were registered.

House prices across England and Northern Ireland charted an average rise of 13 per cent, with the findings proving potentially significant in light of the current level of earnings.

Now a typical house purchaser would borrow nearly three times their income to afford a property - up from 2.8 times income in 2003.

Peter Williams, CML deputy director general, said there was "a picture of contrasting trends in local markets, but the over-arching theme is one of growing affordability problems and a decline in the number of first-time buyers".

The CML's study also revealed that the number of first-time buyers in the UK is continuing to fall.

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