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First time buyers are borrowing more and more to get themselves on the property ladder, according to figures from the Council of Mortgage Lenders.

The CML survey shows that first-time buyer income multiples reached their highest level ever in May at 3.37 times the average first-time buyer income, up from 3.33 in April.

In addition, mortgage interest payments rose as a percentage of income for first time buyers, up to 19.1%, from 18.7% in April. This is their highest level for 15 years.

Home movers also face problems in terms of affordability. In May the average home mover income multiple reached a record 3.03 times, up from 3.01 in the previous month. The proportion of income used to pay mortgage interest also jumped to 16.6% from 16.3% in April.

According to Michael Coogan of the Council of Mortgage Lenders:
“Each month, affordability is becoming worse. The record number of borrowers who are now paying stamp duty makes a difficult situation even worse.”

While the number of mortgage approvals has dropped from last years levels, from 116,000 in May 2006 to 114,000 in May 2007, there has been a rise in the number of remortgage approvals, up by 6% in the first five months of the year.

This has prompted some debt charities to worry about the levels of debt that first time buyers are forced to take on to get themselves into the property market, which increases the prospect of problems with repossession in years to come, especially as interest rates continue to rise.

The proportion of first-time buyers’ income taken up by mortgage interest repayments peaked at 25% shortly before the housing crash of the late 1980s and early 1990s. Today’s levels are short of that mark, at 19%, but this figure has increased by 8% in the past five years.

If you get into trouble with debt, and are unable to make or keep up with payment arrangements, it may be better to sell your house quickly to pay off debts rather than wait until the courts become involved.

A quick house sale can avoid the need for repossession, and may enable you to cover your debts, as well as leaving you with a lump sum to buy or rent another house.

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