House price growth hits young buyers

The steady growth of house prices in the UK continues to hinder first time buyers from getting a foot on the property ladder, new figures indicate.

Data from the Council of Mortgage Lenders (CML) shows that income multiples in November reached 3.29 the average income of the first time buyer household, up from 3.27 in October and 3.08 in November 2005.

Further pressure is set to be placed on first-time buyers with last week's decision by the Monetary Policy Committee's decision to raise interest rates to 5.25 per cent.

It is estimated that the recent 0.25 per cent increase will add £17 a month to the average mortgage payment, which stood at £113,877 for first time buyers in November.

The director general of the CML, Michael Coogan, said: "Month on month we see affordability constraints becoming more pronounced for first-time buyers and last week's interest rate rise will increase these pressures."

However, he added that first-time buyers are continuing to be undeterred by the hikes, with the number of loans taken out by first timers having climbed by five per cent in November.