The average first-time buyer raised 3.21 times their income to get a mortgage in June - the highest figure on record - according to new data from the Council of Mortgage Lenders (CML).
The CML figures show the amount first-time buyers pay from their income rose from 3.2 times the average income in May, and 3.06 times in the same month last year.
Despite the rise, the number of first-time buyers taking out new loans went up by 14% - from 34,800 in May to 39,500 in June.
The CML says this is the highest number of first-time buyers since December 2002 when 44,000 loans were taken out. And as a percentage, first-time buyers accounted for 36% of all new loans - unchanged since April, but down by 2% on June 2005.
Meanwhile, the CML survey also reveals sharp rise of 24% in the number of people taking out tracker loans ahead of the Bank of England’s interest rate rise last week. Tracker loans went up from 30,000 in May, to 38,800 in June, and accounted for 19% of all new loans.
Fixed-rate mortgages suffered slightly as a result declining by 2% - from 143,200 loans in May, to 140,600 loans in June. Even so, fixed rate products still accounted for 68% of all new loans - up from 57% in the same month last year.
CML director general, Michael Coogan, says:
"It is interesting to see that even though average first-time buyer income multiples are the highest on record, first-time buyers are still finding ways of getting on to the property ladder. It is highly likely that more and more young buyers are turning to parents and grandparents to help them raise the deposit for their first home."
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
Staying invested could prove lucrative
Consider lasting powers of attorney
Less environment, more governance threatens to undermine firms' green credentials
Evidence your compliance