Ministers' alarm as door slams on first-time buyers

 

 

Emergency talks on the crisis in the housing market were launched yesterday amid growing alarm among ministers that a generation could be priced out of buying their own home.

 

The collapse in mortgage lending following the credit crunch and the soaring cost of deposits have come together to thwart the hopes of many first-time buyers. Combined with stagnant house prices and the lack of house building, ministers fear that the parlous state of the property market could haunt the Government over the next few years.

The problems were underlined yesterday by figures from the Council of Mortgage Lenders (CML), which showed that many first-time buyers had to put aside more than a year's pay – before tax – to afford the downpayment on a home.

The average deposit jumped from £12,700 at the beginning of 2007 to £31,500 – well over the average annual wage – by the middle of last year. In 2010, 194,600 people made their first house purchase, less than half the number just four years earlier.

 

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