First-time buyers cannot afford mortgages, says Firstrung exec

Date:Wednesday 3rd November 2010
Author: Max Freedman

Young people trying to secure a mortgage simply cannot afford one, according to a representative from Firstrung.

Paul Holmes, chief executive of the company, noted that the average wage of applicants his firm speaks to is about £25,000.

He pointed out that a person on this salary would need to take out a home finance arrangement of at least six times their annual wage to afford an average-price property.

In his opinion, this is "madness".

"The bottom line for young people - which are the people that we always try to service - [is that] property is still too expensive," said Mr Holmes.

He stressed the housing market could easily collapse if interest rates are raised, since it could stretch household budgets too much.

Recent research by Hometrack showed house prices fell by 0.9 per cent in October, which is the fourth month in a row that there has been a negative change.