Plea to help stricken first-time buyers

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The Independent Online

Half of all first-time buyers now have to pay stamp duty on property purchases, according to figures from the Council of Mortgage Lenders, which is calling for more help for people trying to get on to the property ladder.

The CML said exactly 50 per cent of first-time buyers purchasing a property in March paid a price of at least £125,000, the level at which stamp duty becomes payable.

Michael Coogan, director-general of the CML, said: "If this threshold had been uprated in line with house-price inflation since 1997, it would now stand at £45,000, helping many more first-time buyers into their homes."

Continued house-price inflation has made it increasingly difficult for first-time buyers to borrow enough money to fund purchases. This week, two building societies, Yorkshire and Newcastle, raised the income multiples they offer to first-time buyers. Yorkshire will now lend up to 4.75 times borrowers' salaries, while Newcastle is offering up to four times their salaries.

Both of these lenders said they would take borrowers' disposable incomes into account when considering whether to lend up to the maximum, but they are also offering 100 per cent loans to buyers without deposits.

Tanya Jackson, of Yorkshire, said lenders were having to be more imaginative to cater for first-time buyers. The society offers a five-year offset mortgage to first-time buyers, so that parents and other family members can use their savings to bring down the cost of children's borrowing.

Jackson said: "First-time buyers are desperate to become homeowners, though our research suggests many do not fully understand the actual cost and process of purchasing a home."

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