First-time buyers affected by high interest rates

More income is being spent on mortgage payments by first-time buyers (FTBs) in the face of higher interest rates, it has been reported.

According to the Council of Mortgage Lenders (CML), FTBs spent an average of 18.3 per cent of their finances on mortgage interest payments in March 2007.

It added that this is an increase on figures from February 2007 (18 per cent) and February 2006 (16 per cent).

Income multiples have also increased for FTBs, up to 3.31 in March compared to 3.30 one month previous.

But many homeowners may have already protected themselves against such rises by picking up fixed-rate products.

"It is encouraging that those first-time buyers who are getting a foot on the property ladder are opting for fixed-rate products," said CML director general Michael Coogan.

A report from Rightmove last month found that house prices went up by £8,000 over March.

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