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Higher rates hit first-time homebuyers.

FIRST-TIME buyers are feeling the squeeze of higher interest rates with mortgage affordability at its worst level for 16 years.

The Council of Mortgage Lenders (CML) said the typical maiden homebuyer spent 18.3% of their in-come on mortgage interest payments in March, up from 16% in the same month last year.

It means that the proportion of first-time buyers' salary consumed by mortgage payments is at its highest level since 1991.

The CML also revealed that the size of loan compared to salary has edged up in the face of high house price inflation.

First-time buyers in March took out a home loan that was on average 3.31 times their income, up from an income multiple of 3.15 in the same month in 2006.

The increasing costs of home ownership is clearly deterring many potential first-time buyers from entering the market, the lenders' association said.
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Title Annotation:Business
Publication:Daily Post (Liverpool, England)
Date:May 9, 2007
Words:148
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