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New buyers hit hardest by strong property market

First-time buyers have born the brunt of recent house price rises, figures from one price comparison site suggest.

Money Extra reports that the average first-time buyer property searched against rose in value by 14 per cent in the 12 months to November.

This compares to an annual price rise of six per cent for all homes compared, with the typical starter home now costing £182,113 compared to a UK average of £268,201.

Unsurprisingly, the typical mortgage has risen to accommodate this and once again first-time buyers have been hit hardest.

The average mortgage for all buyers has increased by nine per cent, but it is up ten per cent for first-time buyers.

"House price inflation is being outpaced by the rate at which we're going deeper into debt to afford the roof over our heads," said Robin Amlot of Moneyextra.com.

The Building Societies Association (BSA) predicts that growth will continue to be strong into spring 2007.

Buyers have not been knocked by the summer interest rate rise, BSA observes, with net lending for mortgages in November rising to its highest figure in three years.

Click here to see how much you could borrow with Lombard Direct.

20/12/2006 11:12:06

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