New generation paying seven times more for first home

First-time buyers will find affording a house seven times more difficult than their parents as they struggle to find a cheap mortgage, SHIP has revealed.

A study by the trade body for equity release found that in the first quarter of 1983 the average first-time buyer home cost just £20,810.

However, the figure now stands at £136,842, an increase in housing prices for first-time buyers of around 558 per cent.

"These housing figures really highlight the struggle that young people now face to take those first steps onto the housing ladder. House prices have risen far faster than incomes have done since the older generation bought their first homes," said Andrea Rozario, director general of SHIP.

In contrast, Andy Pratt, chief operating officer at Alexander Hall said that the increasing number of 90 per cent loan-to-value LTV mortgages will make finding a cheap mortgage easier for first-time buyers.

He said that the number of firms offering higher LTVs will increase, driving up competition and causing a reduction in mortgage rates.

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2011-04-12 14:53:26 © Moneyextra.com