House price increases and rate rises has added around \u00c2\u00a3120 to the monthly mortgage repayments of first-time buyers, according to research released today.<\/p>\n
Nationwide found the increased price of property had put an additional \u00c2\u00a375 on to the typical first-time buyer’s monthly costs in the space of just 12 months.<\/p>\n
In addition, the three rises in interest rates since last year – has put this figure up a further \u00c2\u00a345, to around \u00c2\u00a3120.<\/p>\n
First time house purchasers in London have seen their monthly bill increase by nearly \u00c2\u00a3200.<\/p>\n
Nationwide\u00e2\u20ac\u2122s chief economist said: “As interest rates have increased to their highest level in over five years, the question of affordability again raises its head.<\/p>\n
“House prices alone increased by just over 10% in 2006 adding almost \u00c2\u00a314,000 to the cost of a typical first-time property, but three interest rate rises in six months add considerably more to borrowing costs for this already struggling group.”<\/p>\n
Adding: “Compared to a first-time buyer entering the housing market in December 2005, a first-time buyer today would have to borrow more money, raise a larger deposit and pay higher interest rates than at this time last year.”<\/p>\n
Homebuyers opting for a fixed rate loan this time last year would have saved \u00c2\u00a3170 to date, with further monthly savings of around \u00c2\u00a350, Nationwide said.<\/p>\n
In a bid to off-set the impact of higher mortgage costs, first-time buyers are increasingly looking towards longer term and interest-only mortgages that can cut more than \u00c2\u00a3300 off monthly payments.<\/p>\n
But Nationwide warned that opting for interest only loans was a highly risky and uncomfortable strategy if early provisions to repay the capital at the end of the mortgage were not made.<\/p>\n","protected":false},"excerpt":{"rendered":"
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