Lenders offer borrowing at six times salary
Affordability is the key

Lenders are starting to offer mortgages equal to six times salary to first-time buyers desperate to get a foot on the property ladder as house prices increase out of reach.

The average house price now is approximately more than eight times national average earnings of £23,600 a year.

The maximum income multiple limits of three to three and a half times salary are now viewed as "inadequate". Last year after Britain's second biggest mortgage lender, Abbey, changed its rules to allow homebuyers to borrow up to five times salary, other banks and building societies plan to go further still.
Some lenders are giving homebuyers up to six times salary, providing they meet "affordability criteria".

Would-be homeowners are being forced to shoulder increasingly large loans to buy their first property. The proportion of first-time buyers borrowing more than four times their income has risen by nearly a third in the last year, up from 17 per cent in January 2006 to 22 per cent in January this year.

This article is for your general information and use only and is not intended to address your particular requirements. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without appropriate professional advice after a thorough examination of their particular situation. Budget 2007 information included in this article is subject to the Finance Bill becoming law.

Article date: 03.07